Avon spent $500M trying to make China work — $135M of it was a bribery fine

Avon entered China in 1990 as one of the first Western beauty companies in the market. When China banned direct selling in 1998, Avon pivoted to retail 'Beauty Boutiques' and lobbied for the ban's partial lifting, eventually receiving a direct-selling license in 2006. Fragrance and cosmetics sold door-to-door were Avon's global engine, and China was meant to be its biggest growth market.

To obtain and retain operating licenses during the transition period, Avon's China unit made improper payments to government officials — gifts, travel, and cash totaling roughly $8 million over several years. When an internal whistleblower reported the conduct in 2008, Avon launched an investigation that consumed the company for six years and cost over $500 million in legal fees, compliance overhauls, and lost business.

In December 2014, Avon settled with the SEC and DOJ for $135 million — $68 million in criminal penalties and $67 million in civil disgorgement and interest. The China business, which had been projected to generate billions, never recovered. Avon's global decline accelerated, and the company was eventually acquired by Natura in 2020.