Direct sellers in China have begun the year with bold marketing campaigns. Amway got Olympic star Liu Xiang on board to endorse its products, while Avon's recruitment drive for direct sellers is frequently on TV.

The firms are emerging from a difficult period and transforming their businesses in China.

Related readings:  Avon wins first direct sales licence  Amway gains direct selling license

The Chinese government approved 14 enterprises to carry out direct selling in 2006 after a regulation on the business came into effect at the end of 2005. This is a small proportion of licenses given there are over 200 direct sellers around the country.

Multinational direct selling giants including Amway Corp and Mary Kay Inc were not granted licenses until the application deadline on December 1.

The government's reluctance to license direct sellers reflects its tough stance on developing the business in China. The application process is slow and complicated.

Once licensed, firms face many restrictions. Under the Chinese regulation, direct sellers must comply with the business model of direct sellers plus retail outlets. Direct sellers must also apply for each type of product they sell. The location for carrying out a direct selling business must be approved by the government. And team payment, a standard feature of direct selling, is banned.

1

2

3

(For more biz stories, please visit Industry Updates)