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The Economic Roundup is an excerpted translation of the Chinese-language ROC Economic Yearbook published by the Economic Daily News, a sister publication of the Taiwan Economic News. The yearbook is the most comprehensive and authoritative source for understanding the fundamentals of Taiwan's economy, both in the macro and micro aspects. The excerpted translation gives foreign readers a concise view of the island's overall economic picture. It is divided into four parts: general economy, primary industries, secondary industries, and tertiary industries.
 
 Tertiary Industry > Direct Sales
In 2005, sales without stores grew strongly in Taiwan, with direct sales racking up over 10% of growth, in continuation of its prosperous business in the previous years. In comparison with the acute competition in the retail industry and among traditional stores, the direct sales industry manifests tremendous potential and insiders believe the scale of the industry will hit NT$100 billion within three to five years.

According to statistics, business of the Taiwanese direct sales industry began to take off in 2000, racking up growth rates several times that of Taiwan's economy. In 2004, overall sales of the industry hit NT$68.3 billion, for growth of 31.38%, 7.56 times of the economic growth rate in the year. 3.87 million persons took part in multi-layer direct sales business in the year, 59,000 or 1.55% higher than the amount at the end of 2003. For every 100 Taiwanese people, 17.09 had the experience of engaging in direct sales, 0.15 higher than the 2003 level.

In 2004, 276 companies engaged in multi-layer direct sales business, 12 more than 2003. 46.38% of those companies were established after 2002, 63% resorted to the multi-layer direct sales method entirely, and 36.59% embraced traditional marketing method and direct multi-layer direct sales simultaneously.

In 2004, average revenue of direct sales firms grew 25.66% to NT$247 million. There were 16 companies with revenue exceeding NT$1 billion, six more than 2003, racking up total revenue of NT$41.365 billion, accounting fro over 60% of the industry's total sales, which underscores the widening gap of revenues among direct-sales firms.

Nutrients and health foods are still the largest item for direct sales business, chalking up NT$27.91 billion of sales, 40.87% of the industry total, followed by beauty and body care products with NT$17.38 billion or 25.45%, clothing and apparels with NT$6.59 billion or 9.65%, and cleaning products with NT$2.95 billion or 4.37%. Nutrients and health foods recorded revenue growth of NT$8.37 billion, the highest, followed by beauty/body care products and information products, with increases of NT$5.6 billion and NT$2.4 billion, respectively. Service products and books/stationeries saw their revenues drop by NT$1.09 billion and NT$563 million, respectively.

Sixty one percent of direct sales firms estimate their revenues in 2005 were higher than 2004 and only 11.96% report lower sales. Industry insiders estimate that total revenue of the industry grew 11.78% to NT$80 billion in 2005. 54.35% of direct sales firms were worried about adverse effect brought about by illegal direct sales firms and 50.36% believe acute competition among similar products will affect their operations.

Revenue of the Taiwanese direct sales industry ranks ninth place worldwide and third place in Asia, trailing only Japan and South Korea. Per capita consumption of direct sales products reached US$89 (about NT$3,000) in Taiwan, the third highest worldwide, trailing only Japan with US$210 and the U.S. with US$101. Forty three percent of Taiwanese people held a positive view of direct sales business in 2005, much higher than 2002's 28%.

   
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