Provo, Utah-based Nu Skin Enterprises has seen Greater China, including Hong Kong and Taiwan, surpass Japan as the company’s top market. Operations in 53 countries netted the company $2.2 billion in sales in 2012, with 78 percent of revenue coming from Asia. Nu Skin CFO Ritch Wood projects that 2013 revenue will total just over $2.5 billion.
The popularity of Nu Skin’s personal-care and nutritional products has benefitted from the one-on-one, word-of-mouth marketing possible through direct sales; however, the company’s China market—where multilevel marketing is prohibited—is unique. Nu Skin employs a single tier of distributors who operate through retail outlets.
“We’ve enjoyed a great growth cycle in Asia,” said Nu Skin CEO Truman Hunt. “There’s a very strong entrepreneurial spirit there. People are hungry for opportunity.”
Hunt also addressed recent questions concerning the validity of the multilevel marketing model used by companies like Nu Skin and Herbalife. “More than 70 percent of the revenue we generate is generated by purchasers who are not participating in Nu Skin sales networks,” said Hunt. With only 15 percent of customers expressing interest in developing their own business, the company’s core profit comes from product users rather than resellers.