Nu Skin ready to make $200m investment in China

16-Oct-2013 - Last updated on 11-Feb-2014 at 15:37 GMT

Nu Skin is looking to further grow its already extensive footprint in the China market by making a $200m investment in its manufacturing and logistical operations there.

The company wants to upgrade its operations in the country by building new stores and manufacturing facilities, in an investment project that is currently being ramped up for next year.

Nu Skin has been extremely successful at tapping into the fast growth for cosmetic and personal care products amongst the country’s growing middle class group of consumers.

Following the future of the China market

"We are deploying a lot of capital in China because we believe in the future of the market," Hunt said in an interview first published by China news agency Xinhua.

In the interview, Hunt also outlined the fact that the company has already invested over RMB450m in building new offices in Shanghai, which to date was the company’s largest ever investment.

Hunt also alluded to the challenges of building a direct sales business in the country, pointing to the fact that the company’s fast expansion in the country has also given rise to copycat businesses and imposters.

Look out for imposters!

"Sometimes we have rogue sales people who go out and misrepresent the way we do businesses in China," he stated in the interview.

Back in July the Utah-based business confirmed that it had received official notification from China's Ministry of Commerce of its approval to commence direct selling activities in five additional provinces and 30 districts.

The provinces include Anhui, Gansu, Chongqing, Shaanxi and Yunnan, and the licensing process included a review of the company's operations.

Staying on the right side of the China authorities

It is the sixth time that the Ministry of Commerce has granted Nu Skin new direct selling licenses and builds on the fact that the company became the first ever foreign-owned business of its kind to be granted a traded license in the country.

In 2012 direct selling in China saw strong growth of 20 per cent in value thanks to the government’s determination to standardise the market by issuing direct selling licences which provided a sound operational environment for industry players, and allowed direct sellers to develop the business.

As well as Nu Skin, cosmetics sellers such as Amway and Mary Kay have seen success with this model in China, and aim to do so in the future as the market shows good potential.