By Jiang Jingjing (China Daily)
Updated: 2008-01-11 13:27

Global direct selling firm Avon Products yesterday announced its China subsidiary has got approval from the Ministry of Commerce to sell healthcare food.

The firm said it believes this will substantially broaden its product line on top of the existing cosmetic and personal care items.

Avon Chairman and CEO Andrea Jung said the living standards of the Chinese have improved remarkably, boosting the demand for more high-quality healthcare products.

She said Avon acquired a certified GMP (good manufacturing practice) healthcare products manufacturing facility in Guangzhou in September. Refusing to reveal how much Avon invested in the facility, Jung said the company plans to build the plant - only 200 meters from its existing cosmetics factory - into a world-class manufacturing base for healthcare products by upgrading its facilities and management.

"This strategic investment not only enriches our product categories in China's direct selling channel, but also enables consumers to enjoy Avon's high-quality products and services further," Jung said, adding that it will also open up more opportunities for 622,000 local Avon salespeople and make them more competitive in the market.

S. K. Kao, president of Avon China, said the new plant is in the process of renovation and facility testing, and is expected to go into production in the first quarter of this year.

The new Avon Life series Wellness will be formally launched in the coming months. Avon also plans to increase investment in research and development by establishing an R&D center in Shanghai to tailor products for Chinese customers.

Currently, imported products or those with Western ingredients dominate China's healthcare food market, so Avon will put its R&D focus on herbs and traditional Chinese medicines, Kao said.

Avon estimates China's healthcare food market stands at 60 billion yuan ($8.26 billion) at the moment and will maintain a double-digit growth annually.

The company said it will invest more in advertisements in China and has set up a strategic alliance with CCTV3.

According to it, this is the only alliance of its kind both in the cosmetic and direct selling industries.

The alliance is helping the company to leverage CCTV's dominant media influence to enhance Avon's brand image to boost its sales volume and strengthen the confidence of Avon's business partners.