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Nu Skin Announces China Expansion Plans

Stocks in this article: NUS

SHANGHAI , Sept. 21, 2012  /PRNewswire/ -- Following its Greater China leadership conference, Nu Skin ( China) announces initial details of its five-year business development plan for mainland China. The plan includes tripling the number of stores and sales support centers by 2017 and expanding its direct selling coverage and distribution model to generate higher levels of market penetration.

"With nearly a decade of operational experience in China, we are building on a foundation of success to sustain growth in this important market," said Andrew Fan, president of the company's Greater China region. "In terms of infrastructure, our plans include increasing our physical presence in the market by tripling the number of stores and sales support centers, as well as completing our previously announced, $55 million Innovation Park and Greater China regional headquarters in Shanghai.

"Additionally, with recently issued direct selling licenses in several provinces, we plan to significantly expand the direct selling side of our business," continued Fan. "Based on market research and continuous consultation with government authorities, we plan to extend the company's product distribution channels to include independent business operators who operate with established business licenses. We will develop this additional distribution channel in a fashion consistent with what the direct selling industry offers in China. Our efforts are designed to align with the government's Twelfth Five-Year Plan to support a consumption-driven economy and to increase employment opportunities."

Expand Physical Presence

Nu Skin's physical facilities plan includes updating existing outlets throughout China and expanding physical locations, with the goal of tripling the number of stores and sales support centers over the next five years. These physical locations will increase the company's presence over a wider area, providing more effective and comprehensive services to consumers and support to the different channels of product distribution throughout China. In addition, to support growing business needs, Nu Skin has initiated the construction of a new Innovation Park in Shanghai, which will include a new research and development center and increased manufacturing capacity, as well as a n experiential and sales support center and regional management offices. This facility is scheduled for completion near the end of 2013.

Build Direct Selling Coverage

Because the geographic scope of its direct selling licenses has been limited, the company's focus to date has been on its employed sales force channel. Now that the company has been approved to conduct direct selling over a sufficiently broad geographic area, and with the advice of China regulators, Nu Skin plans to expand its direct selling operations. T he company also continues to work to expand the number of direct selling licenses in additional provinces.  

Extend Distribution Model

In order to reach further into the unique China marketplace, Nu Skin also announced plans to expand its distribution with the addition of "independent marketers" to its existing multi-channel business model. These legally-registered independent business operators are widely used within the direct selling industry in China and would be authorized to operate sales businesses that provide a variety of products and services under the scope of their business licenses. Consequently, the business model of Nu Skin in China will include:

  • Employed and contractual sales people who sell products from stores;
  • Direct sellers who sell products away from stores; and
  • Independent marketers who will sell products from their own place of business.

"We believe that the expansion of our distribution alternatives in China will effectively supplement our current distribution channels in this unique marketplace, offering additional business and employment opportunities, improving people's livelihoods, and paving the way for our long-term, sustainable growth in this important market," concluded  Fan.

About Nu Skin China

Nu Skin initially commenced operations in China in 2003 with retail stores and employees. In 2006, the company received a direct selling license from the Ministry of Commerce of the People's Republic of China, and was permitted to begin direct selling in Shanghai. The company has since received direct selling licenses in over 50 cities or districts covering 15 provinces.

About Nu Skin Enterprises, Inc.

Nu Skin Enterprises, Inc. (NYSE:NUS) demonstrates its tradition of innovation through its comprehensive anti-aging product portfolio, independent business opportunity and corporate social responsibility initiatives. The company's scientific leadership in both skin care and nutrition has established Nu Skin as a premier anti-aging company. The company's anti-aging products include the ageLOC® R 2 nutritional supplement, ageLOC® Galvanic Spa System and ageLOC Galvanic Body Spa™, as well as the ageLOC® Transformation daily skin care system. A global direct selling company, Nu Skin operates in 53 markets worldwide and has approximately 900,000 active distributors and preferred customers. Nu Skin is traded on the New York Stock Exchange under the symbol "NUS." More information is available at  http://www.nuskin.com .

Please note: This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that represent the company's current expectations and beliefs. In some cases, you can identify these statements by forward-looking words such as "believe," "expect," "anticipate," "estimate," "intend," "plan," "targets," "likely," "will," "would," "could," "may," "might," the negative of these terms and other comparable terminology. Forward-looking statements include, but are not limited to, statements relating to management's expectations regarding the company's expectations, initiatives and plans for Mainland China. These forward-looking statements are based on current information and expectations, and are subject to risks and uncertainties related to (a) changes in operations or future financial results from those currently anticipated, (b) any inability to secure necessary governmental approvals or licenses to effect any future changes or expansion, (c) continued regulatory scrutiny in Mainland China, which has from time to time in the past, and could in the future, negatively impact the company's business, including the interruption of sales activities in stores, loss of licenses, and the imposition of fines, and (d) those risk and uncertainties discussed in the company's filings with the U.S. Securities and Exchange Commission, including in the company's Form 10-K for the fiscal year ended December 31, 2011 and its Form 10-Qs, which could cause the company's actual results to differ materially from expected results. The company undertakes no obligation to publicly update any forward-looking statement contained in this press release, whether as a result of new information, future developments or otherwise, except as may be required by law.

SOURCE Nu Skin Enterprises, Inc.

Copyright 2011 PR Newswire. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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