Avon Calling On Women In New Chinese Venture

HONG KONG - Putting on a happy face should come easier for some Chinese women: Avon Products Inc. has formally opened its direct-sales campaign in China.

Its joint manufacturing venture in the southern city of Guangzhou, just across the border from Hong Kong, began operating within the past two weeks. The opening comes nearly a year after Avon signed the deal.

The venture begins with 104 employees, including 25 sales managers. They will train local staff in the world-famous cry: ``Ya Fang Dao Fang,'' which is as near as Chinese gets to ``Avon calling.''

Avon, which has invested about $1 million so far, holds 60 percent of Avon Cosmetics Guangzhou Ltd. Guangzhou Cosmetics Factory owns the rest.

Avon is among the first foreign cosmetics houses to manufacture in China and the first authorized to sell directly to consumers, says James Preston, chairman and chief executive officer of the New York-based parent. Because few Chinese homes have doorbells, the Chinese Avon ladies will have to content themselves with knocking on doors.

Some product modifications also may be needed to meet local preferences. ``We see the first few months as an opportunity to learn more about what Chinese women want and need,'' he said.

Sales at first will be concentrated in Guangzhou and its surrounding Guangdong province, Preston said. The company estimates 60 million people live in a 100-mile radius of the plant.

By the end of next year, Avon expects to have about 4,000 representatives in Guangdong and forecasts sales of $1.5 million. Sales people likely will earn $1.50 to $2 per selling hour, said Barry Wong, general manager of Avon Cosmetics Guangzhou. That's about twice the average hourly wage in the province.

A selection of 80 makeup and skin-care products will be priced at an average $3, higher than for local products but lower than imports.

The joint venture will produce all its own wares using imported ingredients and containers.

Avon's Pacific region operations accounted for $433 million of last year's worldwide sales of $3.3 billion, with regional sales and pre-tax contributions both having risen more than 60 percent in the past four years, Preston said.