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Mary Kay's pink gospel converts China's women
Nervous and excited, Hao Xiaojuan flashes a warm smile as she enters a room full of young women, most wearing purple jackets and skirts and satiny pink blouses. In this large room in Shanghai, China, everyone applauds as they welcome Hao Xiaojuan who had reached the pinnacle of Mary Kay Inc.‘s sales force as its newest national sales distributor.
“You are now a role model, just like Mary Kay,“ she reads aloud from a congratulatory letter from Tom Whatley, president of global sales and marketing for the Addison, Texas-based company. Four years after the death of Mary Kay Ash, nearly 350,000 Chinese women are emulating the icon, some earning big money selling TimeWise cleansers and facial whitening masks.
In every province, they‘re reading her books, which have been translated into Chinese, and singing her songs, like That Mary Kay Enthusiasm, in Mandarin. This fall, a few began driving her car, a pink Cadillac.
A decade after Mary Kay entered the country, China represents its second-largest market, even though a 1998 ban on direct sales threatened to ruin the venture. Within another 10 years, executives predict, this Asian giant could surpass the United States to be the No. 1 market. The direct seller of skin care and cosmetics owes much of its success to an amazing marketing feat.
In a nation still coming to terms with memories of Mao Zedong and his Communist teachings, Mary Kay has gotten Chinese women to identify with a Caucasian cosmetics mogul with big hair. “I understand how Mary Kay felt when she was establishing her company,“ says 36-year-old Zhao Yinghong, a Mary Kay executive distributor in Zhengzhou, a city of 6 million northwest of Shanghai.
In 1998, she quit her job in the local tax bureau and ordered a Mary Kay training video from Texas. Using the video, she began practicing beauty classes at home. Now, she‘s three months away from joining Hao as a national sales distributor, a level reached by only 30 other Chinese women.
Though Ash never visited China, thousands of Chinese women know the story of how she overcame poverty, a tough childhood, on-the-job gender discrimination, divorce and widowhood to build a nearly US$2 billion (C$2.3 billion) company from an initial investment of only US$5,000 (C$5,700).
The women are even more impressed by the way she lived her life, from putting God and family ahead of her career to practicing the Golden Rule. This kind of connection is helping Mary Kay rapidly expand its sales force.
And it‘s transforming this army of Chinese women into entrepreneurs, in a country where private enterprise is a relatively recent phenomenon.
Mary Kay is counting on China to drive its future sales growth. By 2009 or 2010, half of Mary Kay‘s total sales are expected to come from outside the United States, up from 35 percent today.
In China, the company‘s business is booming, with 50 percent annual sales growth over the last two years. Already, Mary Kay China boasts a sales force almost half the size of the one in the United States, where 700,000 women sell Mary Kay products.
China holds so much potential that executives at the private, family owned company have set their sights on an ambitious goal: earning a billion dollars in annual sales. Today, it‘s almost halfway there. Mary Kay has been making money in China since 2001, and the country ranks as one of its most profitable markets, says Paul Mak, Mary Kay China‘s president.
The 47 year old chemical engineering major with glasses and thinning black hair seems a bit out of place amid the pink and gray cubicles at Mary Kay China‘s main office in Shanghai. But he understands why Chinese women can relate to Ash.
“She‘s a woman. She‘s gone through some struggles. She became successful,“ he says. “It‘s almost like a sisterhood.“ Mary Kay entered China in 1995 with the goal of transferring its culture to a land where many older women, after years of restrictions under Communist rule, don‘t wear makeup.
A vibrant and unique blend of Christian values and enlightened management, the culture is intended to embody the spirit of Ash. Executives credit the culture, more than anything, for their success.
The business started in China with seven employees, crammed into a small room in the business center of Shanghai‘s Portman Ritz-Carlton Hotel, recalled K.K. Chua, Mary Kay China‘s first president, who now oversees the Asia Pacific region.
Any skin care or cosmetics products sold in China must be made in the country. So Mary Kay leased two floors of a six story factory in an industrial park in Hangzhou, a two-hour drive southwest of Shanghai.
Then it advertised openings for beauty consultants, Mary Kay‘s entry level sales position. The company received 2,000 applications. It narrowed the list to 800 women, then 200 and finally hired 22. After three weeks of training, the new consultants went out into the streets of Shanghai. Mary Kay repeated the process in Hangzhou and Beijing.
Next spring, the company plans to open an US $18 million (C$21 million) factory on the land it bought eight years ago. It‘s running out of room at its current plant, which seven days a week, 24 hours a day churns out millions of tubes and bottles of TimeWise Day Solution, Silk Plus Eye Cream and Formula 1 Moisture Rich Mask.
The new factory will be four times larger than the current plant. It will feature a second-floor walkway so the thousands of beauty consultants expected to tour the facility each year can easily peer down at the production lines below.
The building will also contain a small museum with some Mary Kay memorabilia from Texas and an “On Silver Wings“ statue like the one in the lobby of the company‘s Addison headquarters. “On Silver Wings“ is the poem that Ash often used to conclude her speeches.
Although Mary Kay works diligently to instill its culture among its China employees, the company has made some adjustments.
In a country lacking religious freedom, Ash‘s mantra: “God first, family second and career third“, became “Faith first, family second and career third.“ “Principle“ is often used instead of “faith“. And unlike in the United States, prayers are absent from large company gatherings.
The company also discovered it needed to broaden the appeal of its culture. In addition to Ash‘s principles, such as her belief in the beautiful potential inside each and every human being, it added Stephen Covey‘s “The 7 Habits of Highly Effective People“ to its employee training seminars starting in 2000.
Mary Kay has managed to keep one of its key cultural emblems largely intact: The pink Cadillacs. Last month, China‘s first pink Cadillac CTS sedans wound their way through the crowded streets of Shanghai. For the first time, six top-performing national sales distributors in China won the company‘s ultimate status symbol.
Winning a car means even more in China than in the United States. In Shanghai, China‘s most cosmopolitan city, the streets and sidewalks are still jammed with bicycle riders. Cars have only recently become affordable for middle-class Chinese.
Becoming a national sales distributor means Hao is only weeks away from getting behind the wheel of her own Buick Excelle, a midsize car made and sold here that‘s also part of the Mary Kay stable. “I will drive it soon,” she says excitedly.
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