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Avon cautious as buying confidence remains sluggish

Avon Cosmetics (Taiwan) Ltd, the nation's second-largest cosmetics and skin-care product retailer, remains cautious on its business outlook this year because of low consumer confidence, the firm said yesterday.

"Consumer confidence was low last year and the situation will not turn around until the second half of the year," general manager Karen Wang (王子云) said.

Low success rate

"The success rate [of our direct-sales system] declined from the original 30 percent to 20 percent last year and the volume of our customers' purchases dropped as well," she said on the sidelines of a press gathering to promote the company's new slogan "Hello Tomorrow."

Avon Taiwan posted revenues of NT$4.8 billion (US$145.8 million) last year, up 2 percent to 3 percent from a year ago.

The nation's overall retail trade last year reached NT$3.2 trillion, edging up 1.85 percent year-on-year. Department store sales edged down 0.27 percent, the government's data showed.

Wang said public confidence should bounce back in the second half of the year, adding that the firm expects annual revenues of NT$5 billion.

Rival faring well

Shiseido Taiwan, the market leader, was more optimistic about its business outlook.

The company, which owns over 20 brands, churned out products worth NT$8 billion last year and expected the figure to grow 8 percent this year, the Chinese-language Economic Daily News reported last week, without citing sources.

While keeping her position for the company in Taiwan, Wang also assumed control over Avon's business in South Korea last month.

Avon entered the South Korean market four years ago and reported sales of US$3 million last year.

Wang expected the figure to double this year by imitating the company's strategies in Taiwan.
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