Another direct-seller awaits China bonanza (USNA 2Q05 conf call)

Nutritional, personal care and weight management products company USANA Health Sciences (ticker: USNA) is as excited about direct selling opportunities in China as Avon (ticker: AVP) is. Here are key quotes from USANA Health Sciences President David Wentz:

....China remains a market of significant interest for USANA. We continue to await final legislation regarding the laws that will govern direct selling. We’re in the process of developing a specific entry strategy based on the current information we know about the direct selling rules. Our objective is to be able to move quickly once these rules have been issued.

....currently, it doesn’t look like they are going to (allow multi-level marketing), but the lobbying efforts are very heavy to try and get them to open that up. They may start off without multi-level and then, as they get more comfortable, create more allowances and modify the rules....

....we’ve.....strategized on ways to make our plan work in whatever arena they provide for us. So we could go in, and we’d have to modify things....but we still see a way for it to be a viable market with a comp plan that is different just for China and allow our other associates to still participate, but in a different method than they have as we’ve opened other markets. It won’t be quite as seamless as we’ve had in the past....but the potential is still so great.....

(Quotes are from the CCBN StreetEvents transcript.)

USNA chart.

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