Direct Product Sales Business in China of Health Products

  

Build a new force in China's Direct Sales of Health Products 

The Deconstruct the other side you don't know: "Regulations on Direct Selling Management" was promulgated, and the direct selling of health food products officially obtained legal status in China. In this regard, health care brands have officially set sail according to the times, and China's direct sales  including online sales business has also transitioned from an early stage of strict supervision to a relatively loose stage.

 

Since the beginning of 2018, negative industry news has emerged one after another, and the overall policy has been tightened again. And with the improvement of Chinese residents' digital level, the change of social contacts, and the awakening of quality consumption awareness in recent years, Chinese direct selling brands are in urgent need of transformation and upgrading.

 

As far as China's health product sales channels are concerned, direct sales are still the main channel, accounting for 47.3%. As of the beginning of 2020, the Ministry of Commerce of China has announced that there are 90 companies qualified for direct selling (including 32 foreign-invested companies), and a total of 75 companies are engaged in health food sales.

 

International health care brands: Nu Skin, Amway and Herbalife

Picture: Nu Skin, Amway, Herbalife and other international brands have successively obtained the qualification of direct sales of health products in China.

 

 

 

Interpretation of China's direct selling policy, what can and cannot be done

Ban multi-level distribution

There is a significant difference between the Chinese direct selling market and the Western direct selling market. At present, China's direct selling market only allows single level sales (Single Level), and prohibits multi-level distribution (Multi Level) recognized by Western markets. Under the direct sales model in China, direct sellers are prohibited from developing multi-level downlines and earning commissions at various levels.

 

In the Chinese market, the formation of a multi-level online and offline sales relationship, and the calculation and payment of online commissions based on the sales performance of the multi-level offline and the number of offline is a serious red line behavior.

 

Pay attention to the commission limit

China's direct selling market has a commission ceiling mechanism. Direct selling companies can only calculate the income from direct sales of products to consumers by direct selling companies, and the total commission shall not exceed 30% of the direct sales of products to consumers.

 

Chinese Direct sales recruitment policy?

Direct selling companies and their branches should sign sales contracts with them when recruiting direct sellers, and cross-region sales are not allowed.

 

That is to say, direct selling companies need to ensure that direct sellers only carry out direct selling activities in areas where service outlets have been established within the administrative area of ​​a province, city or county where one of its branches is located. 

Persons who have not signed a sales promotion contract with a direct selling company or its branch shall not engage in direct selling activities in any way.

 

In addition, direct selling companies and their branches shall not publish advertisements promoting the sales remuneration of direct sellers, and shall not make the payment of fees or purchase goods as a condition of becoming a direct seller.

 

Digitalization and social e-commerce, the best catalyst for the transformation of direct sales of health products

No matter how the generations change, direct selling will always revolve around "social". In the old direct selling era, brand direct sellers would usually sell products from door to door, or arrange gatherings of relatives and friends to unify "Amway" products.

 

In the new context of direct sales in 2020, the integration of online e-commerce, social consumption (such as WeChat e-commerce), and the digital model of two-line shopping may become the key to promoting the growth of direct sales.

 

Use the Internet and online social networking to "leverage power" to enhance the breadth and breadth of direct selling business. Rely on offline stores to provide consumers with a place to experience peace of mind and enhance consumer confidence. 

The two-pronged approach is more in line with contemporary mainstream Chinese consumer habits.

 

At the same time, through the digital empowerment of the CRM system, strengthening the maintenance of the stickiness of members, communities and even private domain traffic is one of the important ways to continue to "blood" the brand.

 

 

 

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