American brands target growing greying market

American direct selling giants are cashing in on the mainland's ageing population, helped by government policies and the explosive growth of the emerging middle-class willing to spend on beauty products.

Last year, the country's elderly population reached 194 million, accounting for 22 per cent of the global total. It is expected to top 487 million by 2050, or more than 25 per cent of the world's elderly, according to the China National Committee on Ageing.

Amway, a direct seller of vitamins, air purifiers and cosmetics, and Nu Skin Enterprises, which offers anti-ageing products and nutritional supplements, are both racing to come up with new products and services in an industry that will reach US$100 billion by 2015.

By the end of this year, Nu Skin will launch a regional headquarters in Shanghai with an investment of 450 million yuan (HK$570 million). It will house a research and development centre, a customer experience centre and manufacturing facilities.

"China already surpassed the US in 2011 in anti-ageing product spending, accounting for 25 per cent of our direct selling sales worldwide," said Vincent Cheng, a regional vice-president of Nu Skin Greater China, adding that the facility could support 10 times the current growth of the brand in China.

In the first quarter, the US brand recorded 90 per cent growth to US$175 million in its China business. Sales of its anti-ageing products in the country surged 60 per cent to US$560 million last year.