Haiwai Net, September 26 Nu Skin is growing rapidly in mainland China. Data from the second quarter earnings report shows Nu Skin's revenue in mainland China has seen rapid growth. In the second quarter of 2018, Nu Skin's revenue in mainland China increased by 43% over the same period of previous year, and its revenue in the first half of the year showed a 37% year-on-year growth. In a recent interview with Haiwai Net of People’s Daily, Vincent, the president of Nu Skin mainland China, expressed his opinions on enterprise innovation and “New Direct Selling”.
“In 1984, Nu Skin originated in Provo, a small city in Utah of USA, as a small business started by a couple of young men with $5000. Blake M. Roney, among others, having found that ingredients harmful to the human body were added to all of his elder sister's skin care products, wondered thatwhy there was no one making products all with good ingredients?”Vincent said,“It wastough at the beginning, and nobody offered to help with making the products because the product idealwas positioned soadvanced that no money would be made out of the production per this formula, and no one would help.”
Beginning with such a small wish, and adhering to the concept of “All of the good, none of the bad”, Nu Skin came to Asia from the United States. In 1998, it entered China to set up the production base; in 2003, Nu Skin China was officially established; and in 2014, Nu Skin invested approximate RMB 500 million yuan to build the largest overseas headquarter in Shanghai. “Our company designs the innovation park following an environmental protection concept, with 70% of the light in the Park being of natural sources. No one of the Company has a permanent office. When it is time to be off duty, you just pack up your stuff and tomorrow you can change to another seat.” said Vincent laughed, just like a university campus.
According to Vincent, Nu Skin’s performance in China now accounts for more than 30% of the global market, and it is the world's largest market. “Over the past few years, the performance in the market of mainland China is very stable. In 2017, its performance increased by 18%; and in the first half of this year, 37% year-on-year revenue growth was achieved.” Vincent emphasized that Nu Skin was not keen to pursue a rapid growth of performance, but a long-term and sustainable growth. Therefore, all the strategic layout and marketing plans are set centered on this goal. “For example, we attached great importance to the protection of consumers' rights and interests.” He said, each product of Nu Skin has a monitoring code on it. “The code allows you to know on which day the product was sold to whom from which store; when the product is replenished and delivered; where is the origin of its raw material and under which batch number it is produced. For each batch of products, we keep samples in the factory so that the batch number, raw material, sources and suppliers can be traceable once there’s any product quality problem. ”
He also admits, there is no threshold for direct selling that requires high education level to join, so people who join us are actually from all levels, and Nu Skin attaches great importance to day-to-daytraining and practice. “We have a quarterly communication training meeting with middle-ranking and above salespeople. On the one hand, we let them know what happened to the company in the past quarter, what the results are, and what the promotion plans and priorities for the next quarter are. At the same time, every time there will be the business ethics education, we hope that both experienced and fresh business partners can clearly know the meaning of compliance and what behaviorsare non-compliant through repeated reminding. Nu Skin was listed in the United States and subject to US regulation. So in China, Nu Skin is very cautious about doing a lot of things. “In Chinese market,we must take the initiative to do a good job of supervision over education and training; otherwise any non-conformance may affect the U. S. stock price. Therefore, we can say that the standard of our internal supervision is stricter than that of the external one.”
Vincent expressed, with a market of about 35 billion dollars, China's direct selling market has grown very fast in the past few years, almost the same as US.“Over the six years from 2011 to 2017, the average yearly growth rate in mainland China is about 12% and that in the United States is barely 3%. In terms of the global market share of direct selling, China's share of direct selling has increased from about 9% in 2010 to 17% in 2017. If this ratio sustains, China will probably become the world's largest direct selling market in a few years. We are also very happy to see the direct selling industry heading for a positive development direction.”
When it comes to whether Sino US trade conflicts will affect the strategy of Nu Skin in China, he said “As important trading partners, China and the United States should seek a solution for bilateral trade issues through negotiation in a peaceful and rational manner, in which way we can maximize the interests of both governments and the people. Nu Skin always has confidence in the Chinese market. In order to support the long-term and sustainable development of business in China, we held an investment agreement signing ceremony with Shanghai Fengxian Industrial Development Zone, launching the Nu Skin China Phase II Project on September 26. The new Phase II Project will introduce international advanced automation production lines and will focus more on the needs of product quality upgrading, as quality and safety of products have become one of the most concerned issues for consumers. Especially in recent years, with the continuous upgrading of online consumption, consumers are increasingly pursuing product quality and customized service. In responding to the trend, Nu Skin had also put forward the brand advocacy "Discover The Best You" that suits the new era, and planned the vision of the 3.0 era focusing on brand leadership. This project will help to upgrade the Company’s level of production automation, promote the product innovation and quality improvement on continuous basis, and serve as a powerful guarantee for the Company to achieve our development strategy for 3.0 era.
“Nu Skin has high requirements for product quality in every aspect.” Taking health care products as an example, Vincent said, Nu Skinis almost using the pharmaceutical standards to produce health care products.
Vincent particularly mentioned product innovation. “In terms of product innovation, Nu Skin prides itself most in ageLOC technology platform.” According to Vincent, ageLOC technology platform uses a complete genetic database which has a lot of clinical evidence, and among them, the most famous was an experiment that LifeGen spent a period as long as 30 years to follow. In 2011, Nu Skin invested 11.7 million dollars to merge LifeGen.
In some experiments, we have found out which genes are involved in the aging of genes, in particular organs or in certain diseases. We can tell what the gene expression looks like when it's young and what it looks like when it's old. Humans probably have 25 thousand to 30 thousand sets of genes. So we can figure out very clearly what the genetic map of a young age, an organ or at the attack of a disease looks like, and what it looks like when you get older. So, given the genetic maps for comparison, we can find those effective ingredients that can influence gene expression, regulate and control the old-age gene expression back to the young state. This is the most basic theory of ageLOC. This basic theory determines the development of many Nu Skin products, but this is only the first step.We need to do clinical trials to confirm the safety, effectiveness and repeatability of the products.”
“Innovative products and customization are Nu Skin’s core competitiveness.” he particularly talked about "customization".
“We have a product called ageLOC Me, and a special APP is developed to connect to ageLOC Me. When you are about to run out of the product in about 20 days, it will inform you that you should check next month's customized formula. You need to answer about 20 questions which may include your location, age, gender, environment, sunlight exposure, skin type, wrinkle type and your choice of fragrance After all these questions, it will help you develop anexclusive formula. We offer a total of more than 2,000 combinations of formulas from which your exclusive formula can be singled out through these 20 questions. You can also use your mobile phone to place your order on APP without waiting the product being run out yet, and the product will be sent to your home. You can also take a customized name, which will appear on the product package.”
Vincent indicated that Nu Skin’s customization is targeted at the mass. In its next step, Nu Skin will developthe make-up customization, using APP as well, allow customers to choose the make-upcombinations that suit them best according to their skin color, various scenes and different periods of time.
New Direct Selling
Vincent said in the interview that Nu Skin put forward a whole new concept called “New Direct Selling” last year. “The concept of new direct selling originates from ‘New Retail’, but has its own characteristics in contents.” Vincent said, “cooperation and changes are to be made centering on the targeted population, and research & development to be carried out on scenes and products, that is the concept of new direct selling concept.”
“First, our target customer group is the millennial generation.” Vincent said the millennial generation probably accounts for 400 million of the population in China, and will have the biggestspending power in the future. “Online consumption of Nu Skin has in recent years grown very fast. The Millennials were born in the electronic age, and mobile phones and computers are basic things that they live together every day. Not only the target customer groupcomprises mostly the millennials, so far, millennials have accounted for about one-third of our total employees. ”
"Secondly, combine the online and offline services." Vincent introduced, "In the online part, recently we developed a “Nu Town”cooperated with Alibaba Cloud, which includes six functions: service, opening, sales, ordering, sharing and socializing. This is completely aimed at young people's life mode and life pattern; we empower distributors and salespeople to have better tools and ideas to provide better service to consumers."
As for the offline part, Vincent introduced that Nu Skin used to set Pop-up shops in cities like Beijingto showcase Nu Skin’s corporate culture and products in well-known shopping malls. People passing by are intrigued by our scene designs to come and see what the displays are about. At the same time, the interactive gameson the scenemake many visiting people love to share in the social media.
"We arranged a Millennium Festival in April this year. It was a campaign for young people, overturning the form of commendation meetings, etc. by direct selling companies. The design and many interactionsin field were designed for young people. Also we made our inner infield very special by interacting with young people in various ways, such as stage plays and storytelling. ” Vincent revealed that the next Millennium Festival of Nu Skin is round the corner. “It is scheduled on October 6thin Shanghai and October 13thin Tianjin, and further innovation and break through are made to the contents, hoping everyone can feel refreshed.”
Force for Good
“Force for Good” is included in our mission statement, that is to be a force for good throughout the world by empowering people to improve lives with rewarding business opportunities, innovative products, and an enriching, uplifting culture.
“The characteristics of our concept of ‘Force for Good’ are reflected in three aspects: First, our plan of ‘Force for Good’ is for a period of least ten years or more, which is long and sustainable. Second, we do not expect to find onevery powerful person to do 100%, but to find 100 people, each doing 1% to complete the 100%. We focus on creating an atmosphere of good deeds, hoping to inject positive energy into the society. Third, our philosophy of doing good emphasizes on teaching people to fish rather than just giving them the fish. After accepting our help, the vulnerable groups, if capable, may help more people, and in this way good deeds will expand on and on. ” Vincent said.
Based on such concept, Nourish the Children (“NTC”) was officially launched in 2002 by Nu Skin, and a special nutritious meal “VitaMeal” was donated. This was made with high-quality rice, barley, lentils and twenty-six vitamins and minerals, mainly offered to children of malnutrition in remote areas. ” A VitaMeal can satisfy the nutritional needs of a three-year-old child a whole day. Since 2002, we have donated 600 million VitaMeals worldwide, about 1/10 of which were donated to China, covering more than 29 provinces and municipalities and 80 counties. Vincent also said the “Nu Skin Greater China Children Heart Fund”was also launched in 2008to help children with congenital heart disease. A simple operation may cost about RMB 30,000 to 50,000 yuan. So far, Nu Skin has helped nearly 8,000 children, not only to save children's lives, but also to give birth to new lives, because they can completely recoverto be like normal children.
"We also do trainings of congenital heart disease screening and treatment for doctors, so thatwith simple indicators, congenital heart disease can be accurately diagnosed, and this will help to avoid waste of medical resources, and get accurate diagnosis and precise treatment, just as stated in the mission of Nu Skin, to ‘empower people to improve lives, Vincent said, "Surly, a company's ability is limited, if there being more opportunities in the future, we would open this platform, expecting more companies to participate.”