Avon Case Study

1.Introduction of Avon

1.1 Foundation of Avon:

Avon, founded in 1886 in New York, the USA, is an American international manufacturer and direct selling company inbeauty, household, and personal care categories. Avon had annual sales of $10.0 billion worldwide in 2013. It is the fifth-largest beauty company and, with 6.4 million representatives, is the second largest direct selling enterprise in the world (after Amway). Avon Products is a multi-level marketing company. The company's CEO isSherilyn S. McCoy, who was appointed to the position in April 2012. The former CEO, Andrea Jung, became the executive chairman of the board. At present it has directly invested in 45 countries and regions, with more than 300 million independent sales representative and operations in 137 countries and regions. It adheres to the business philosophy that knows a woman more than women, for the beauty of a woman. It is horned as the originator of direct-sale industry and enjoying high reputation in the world.

    The name of Avon originated from a history of a diffuse Elegant, In fact, it was a beautiful river next to Shakespeare’s former residence, a great giant in literary circles.

1886s,a book salesman named David Mcni found that the book with the gift of perfume was very popular with customers when he came to sell books. David were deeply inspired and founded “the California Perfume company” in the same year in New York, specialized in perfume business, which is the predecessor of the Avon Co. Until 1936s, “the California Perfume company” business had been extended to the whole series of beauty care. And then, David renamed the company Avon" in 1939s because of his admiration for Shakespeare.

Avon in China:

At the beginning of 1990, Avon is the first foreign company in China and bring its direct selling model, historical mission and culture to China. More than 10 years, with the rapid development of China's economy, Avon's business also accelerated growth in China. From the first branch founded in Guangzhou in 1997 to the 91 branches in the country, south to Guangdong, Sinkiang on the north. "Avon lady" team of mighty have the similar name. The process of selling products, which is the beauty of the make-up of knowledge of the education process to customers, so some people say that Avon brings colors to China, Avon taught Chinese women how to make up yourself. In this process of popularization education of beauty, More and more Chinese women, they didn’t have deeply understanding to beauty before, began to pay close attention to herself and beauty.
It occurred many beautiful scenery in beauty industry of China and bred up the existence of hundred million market in China due to Avon.

Avon has been with the "trust, respect, faith, humility, and high standards" of the Avon values. Today, Avon has become one of the most powerful enterprises in America, and is one of the largest cosmetics company over the world, It invest directly in 53 countries and regions, own 43000 employees, supply women in 145 countries and regions with more than twenty thousand kinds of products by 440 representatives of marketing, including the famous Avon color series, Avon new and live series, Avon skin series, Avon skin management series, bright professional series, Avon series, Avon herbal family series, health products, new brand mark series, and a variety of fashion jewelry. In 2003, Avon's annual net sales reached $68 billions, there was an increase of 10% compared to 2002. Avon planed to achieve annual sales of $85 billions in 2005 to 2008.

1.2 Development Process:

Avon entered China in 1990, and we were the first international direct selling company to open our doors here.

    On January 23, 1990, Avon and Guangzhou Cosmetics Company invested and established “Sino-US joint venture·Guangzhou Avon Co.Ltd.”

November 14, 1990, Avon put into operation in China.  

June 15, 1998, the original approach to direct sales mainly of Avon become China's first approval from the government restructuring of enterprises, introduction of the wholesale, retail sales of products.

In May 1998, The first counter of Avon was established in Dongguan.

In March 1999, The first Avon products franchised store was set up in Guangzhou;

In October 2000, Avon established the first flagship store in Beijing Oriental plaza;

In 2002, Avon's  the first batch of concept stores opened in Beijing, Shanghai and Guangzhou.

In November 2000, Avon China started selling products online.

In November 2001, Avon global board of directors and CEO Mrs, Andrea Jung was elected 25 of the most influential global business leaders" all over the world by Times, a famous American magazine.

In 2001, Avon specially designed new makeup Up2 series products for young Asian women in mainland China as the first stop, and made a big leap towards Asian markets as the first stop.

March 2, 2006, Avon (China) Co., Ltd. officially announced by the state Department of Commerce awarded the first domestic direct sales business license.

April 3, 2006, Avon (China) Co., Ltd. announced: Launch a nationwide consumer advisory services activities to promote its full success of the pilot single-layer direct sales model.

Recently, Avon has struggled with the global sales falling for five straight years and North American revenues falling 18% in 2014.

In 2016, Avon completed the sale of the remainder of its American business. All of its operations are now outside the United States. As part of a three-year plan, Avon will also move its headquarters to the United Kingdom.

1.3 The reasons of development in China:

2. Introduction to Avon unique sales model

2.1 Uni - Level Marketing

In terms of the regulation of our country at present, multilevel marketing is prohibited. So what is the Uni - level marketing? it refers to the direct selling products can reach consumers' hands only handle a generation of the level of the distributors in the direct selling enterprises of direct selling activities. The sheer level can also show the sellers take delivery and settlement from the chains and sale the products to consumers, so as to obtain their own sales commission. In this kind of sheer level direct marketing, the marketing organization can not be extend indefinitely, but only limited to a layer. Accordingly, its direct sales agent and direct marketing organizations always is chain stores expand by direct selling company as the core, no matter how much offline marketing salesmen it has, how big is the marketing organization, all of those were asked the same policy. In process of direct marketing mode, sales is always the first theme. In China, the most typical uni - level marketing is Avon Company in the United States.