1. Does it appear that Avon’s marketing strategy in China is working well? Might some other strategy have been more effective? In 2003, Avon’s sales in China reached $157 million, up 20% from the year before and over twice what sales had been in 1997. This was a major accomplishment for a company whose very existence in the Chinese market had been threatened when the Chinese government banned direct selling in April 1998. Direct selling was Avon’s only sales channel in China, and the only marketing method it had ever used in the company’s history. As a direct result of the ban, Avon’s operations in China lost $110,000 per day in sales. Its 150,000 Avon ladies were out of jobs and the company had to lay off 20% of its regular staff. (See Case 3.3, Avon Products, Inc. (A).) The resurgence since 1998 was a result of the company’s immediate response to the crisis, and the building of a new marketing structure.