The direct seller ended the quarter with over 114,000 certified Sales Promoters registered with the Chinese authorities, and more than 31,000 applicants currently in the process of being certified. Avon received a direct-selling licence from the Chinese Government in March this year.

Avon's business in China had an operating loss of US$4 million in the second quarter, compared to an operating loss of US$1 million in the same period of 2005, due to increased advertising expenses associated with the launch of direct selling and US$2 million in restructuring costs.

Nu Skin

US direct seller Nu Skin, which recently received a direct-selling licence from the Ministry of Commerce, said its second-quarter revenue in China was US$53.9 million, a year-on-year drop of 16 per cent.

The Chinese mainland posted a 41 per cent local currency revenue decline from the prior year, while Hong Kong contributed positively to the quarter with local currency revenue up 19 per cent, the company said.

"With the official acceptance of our direct-sales application in China, we can now focus on intensifying the expansion of our business model. In the next few months, we will introduce direct-selling components to our business in Shanghai with anticipated expansion into other provinces next year, setting the stage for growth in 2007," the company said.