Mary Kay Cosmetics in China

Written by TRACY on . Posted in Recruiting

Earlier this week, I mentioned that Mary Kay is relying heavily on overseas markets to fuel its worldwide growth. Several years ago, the company stopped reporting revenue figures from the United States, and began only reporting worldwide revenue. I suspected then that this was because Mary Kay Inc. was focusing on growth in the overseas market.

A bit of research into Mary Kay China has confirmed this. In recent years, Mary Kay has appeared to spend a lot of effort marketing in China and India. These two markets were an easy mark for the company, simply because of the huge population size. To put this in perspective, the population of the United States is currently over 300 million, while China is over 1.3 billion, and India is over 1.2 billion people. While the spending power of consumers in India and China is lower than the United States, the sheer size of those markets still makes them attractive to Mary Kay Inc.

So where does Mary Kay China stand?

In 2008, Mary Kay had 200,000 consultants in China. The company reported that in 2009, China contributed 25% of Mary Kay’s revenue.

In 2010, Mary Kay reported 500,000 consultants in China, with 20% of the company’s revenue is from China. According to a company press kit, company sales were $2.5 billion in 2010, meaning that China brought in $500 million in revenue for Mary Kay.

In September 2011, Mary Kay reported 600,000 consultants in China and expected a 30% increase in revenue for the Chinese market. That puts Mary Kay’s estimated revenue from China at
$650 million in 2011. Mary Kay says that in 2012 or 2013, China will bring in $1 billion in revenue for Mary kay, and overtake the United States as its largest market.

It’s easy to see that China is an important marketplace for Mary Kay. In addition to the number of potential consultants there, the fact sit hat multi-level marketing is a much newer concept there. For years, China did not allow any such activity there. Only true direct sales were allowed, but now the regulations have been eased, allowing companies like Mary Kay to do something more akin to what they do in the U.S.

Consumers in China are simply not as aware of the pitfalls of MLMs and pyramid schemes. Sadly, there are plenty of unsuspecting marks in the United States, even with educational sites like Pink Truth and Pyramid Scheme Alert warning consumers. This type of educational material is not as readily available in China, so it is much harder for consumers to learn the truth about companies like Mary Kay.

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Comments (13)

  • skeptigal

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    I wonder how the gender imbalance in China will affect the future of Mary Kay in that country, which is known for its barbaric practice of gendercide. Buddha first, Family (including only 1 male offspring) second, and career third?

    Reply

  • exIBC78

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    Interestingly every consultant still only have an average of 1000 in orders.

    Reply

  • gotheart

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    Tracy, ya speak Mandarin? ;)

    The 98% of ibc and sd should turn on the 2% and Occupy mkc.
    The mkc is building mkchina on the backs of USA ibc and sd.

    They should be mad as hell and not take it any more.
    I sure am mad about it.

    Tracy thanks again for educating me/us with this revealing article.

    Sincerely.
    gotheart

    Reply

  • DLPSOY

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    When China’s government and IBC’s figure this out, I believe they will give MKC the boot.

    If so, that will be a huge financial loss for MKC re income and all the other expenses invested in opening and supporting that market.

    .

    Reply

  • Lazy Gardens

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    Looking at the number of consultants and the revenue … they have TRIPLED the number of consultants IN China, without tripling their revenues from there.

    So as they continue to recruit more and more, the chances of actually making any money from sales gets lower and lower.

    Reply

  • onceapinkhead

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    I read an online story recently that detailed the atrocities forced on women to enforce China’s one-child-only policy–details about how renegade forces (to which the Chinese government turns a blind eye) pull women off the street or from their homes who are suspected of being pregnant with their second child. They’re taken to a “hospital” to have their babies forcibly born and die.

    Can you image if one of these mothers decided to become an IBC in the hopes of “creating a better life” and avoid this terror from happening? Only when it does, and Mary Kay does absolutely nothing for them? The atrocity alone boggles the mind. . . Mary Kay’s indifference is something else entirely. :(

    Reply

  • raisinberry

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    One wonders how a company, a nation, can do business with a political regime that would force its destructive ideology on women, all the while pretending to be its benevolent guardian.

    Oh wait. Perfect fit.

    Reply

    • ryan

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      Witty!

      Reply

  • Weekended

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    It would be interesting to see how Mary Kay Inc. markets its “spirituality” in China and India. I’d guess that they don’t spout the “Christian” title over there.:S

    Reply

  • jiangwei

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    Direct-selling/MLM orgs are strictly illegal in China (there are many homegrown ones out there) except for Amway, which somehow managed to avoid being classified as such. I wonder how Mary Kay gets around this.

    Reply

  • candy

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    The real problem is that in order to sell cosmetics in China, the cosmetics are subjected to animal testing per the governments regulations. This totally negates the claim that MK does not test on animals. Urban Decay just pulled out because of this reason. From MK website…”Mary Kay® does not support animal testing. Mary Kay® is committed to the elimination of animal testing and is a strong advocate of utilizing alternative methods to substantiate the safety of ingredients and products. We do not conduct animal testing on our products or ingredients, nor ask others to do so on our behalf, except when absolutely required by law.” … in China…

    Reply

    • Lazy Gardens

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      Several governments are negotiating with China to change policy so they will accept results done and accepted by any of several national oversight agencies, such as the USA’s FDA. Right now, tests considered acceptable can be done in any of several countries and be accepted by almost any other country. The goal was to minimize duplication of testing.

      But – right now – if the testing is not done in China, according to the Chinese protocols, they don’t approve the products.

      BTW, the “must be Chinese” testing holds true for more than cosmetics. Electronics had redundant testing too, and it’s expensive and annoying.

      Reply

  • Amanda

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    Sadly China also still requires animal testing on cosmetic products and Mary Kay of course complies killing thousands of innocent animals each year, so very sad.

    Reply

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