Mary Kay Seeks Healthy Options

World-leading direct-selling producer Mary Kay China Co Ltd is expanding its business from cosmetics to the health and well-being market, enlarging its potential customer base from adult women to include the elderly and children.

That could have a big impact on China, which since 2013 has been the largest market for Mary Kay Inc, the Dallas-based privately owned multilevel marketing company with global wholesale sales of $4 billion.

The Mary Kay China Co Ltd has developed healthcare and nutrition products in China to meet the increasing demands for a healthy lifestyle, according to Paul Mak, China president of Mary Kay Inc.

The newly added sector has invited health trainers and diet experts to train their sales team. The process has involved more than 6,000 salespeople, about 2,000 of whom are willing to become "healthy trainers", helping their consumers in improving healthy lifestyles, according to Mak.

In May, the company rolled out its first health product－"Daily Benefits"－which focuses on anti-oxidation. The product targets female consumers and the company will later expand to a larger range of consumers.

Mary Kay has invested 960 million yuan ($143 million) in an Asia-Pacific center in Hangzhou, Zhejiang Province, updating its function into developing and manufacturing and distribution and is about to set up a second research and development center in Shanghai. The company didn't reveal its investment on its second center.

Mak said the health sector of their business is expected to grow even larger than the cosmetic unit, as the latter mostly appeals to female consumers. The health product has a larger potential audience, as China has the world's largest aging population. Last year, Mary Kay China tested the waters for health sales in China by developing products aimed to help improve sleep, digestion and boost the immune system.

According to Market research provider Euromonitor International, vitamins and dietary supplements have a market value of 122.8 million yuan and weight management and well-being had a market value of 11.39 million yuan in 2016.

Jason Yu, general manager of Kantar Wordplanel China, said Mary Kay faces some growth challenges in the cosmetics market in recent years as the direct sales model is under pressure from other channels like e-commerce. Expanding into adjacent areas where face-to-face interaction with consumers is still crucial in helping the brand to meet new consumer needs.

In terms of Mary Kay's cosmetics business, the firm will continue to expand into third-and fourth-tier cities as their main battlefield.

Mary Kay has about 6,000 workshops nationwide. The workshops will offer seminars to communicate with consumers on healthy diet and cooking as well as exercise.

In 2016, the company ranked second in market share in the beauty and personal care category, taking up 2.5 percent of the total. It was exceeded only by L'oreal Group, which accounted for 3.9 percent of the market. The beauty and personal care market has a retail value of $443.78 million and color cosmetics has a market value of $50.24 million, according to data from Euromonitor International.