China has seen a growing number of direct selling companies in the past decade with their tax revenue hitting over 300 billion yuan ($4.7 billion), the Ministry of Commerce (MOC) said on Wednesday.
China now has 71 direct selling companies employing over 2.8 million people with products ranging from cosmetics to health care equipment according to an MOC statement.
In 2014 alone these companies paid taxes of 5.7 billion yuan and their sales revenue reached 25.1 billion yuan.
The MOC said it will strengthen supervision to help consumption and increase employment.
China issued two regulations on direct selling in 2005 and announced amendments in March 2014 to step up supervision of the business.
In China, companies that sell their own products to consumers (i.e. without going through a distributor or wholesaler) need to obtain the Direct Sales License with the local branch of MOFCOM and the Administration for Industry and Commerce (AIC). The license shall be issued within 90 days from the date of receipt of the application form.
China is currently ranked No.2 in the global direct selling market contributing 23.3% sales to global industry revenues, according to Direct Selling News billion-dollar markets report. Global estimated retail sales topped US$178 billion in 2013, up 8.1 percent from 2012, according to the most recent data from the World Federation of Direct Selling Associations (WFDSA).