Recent reports have indicated that BabyCare's products have been sold through a consistently increasing sales force that utilizes the standard MLM commission-based compensation plan; which operates within the legal confines according to the laws of The Municipality of Beijing. The company has been working to obtain similar licenses in the surrounding provinces as well. These direct selling licenses allow the company to engage non-employee distributors aside from the company's traditional service centers.
USANA's short term objective within this acquisition to gain experience in the Chinese direct selling market. This means that BabyCare will continue to function on its own over the next 18 to 24 months as a standalone business in China. USANA believes that it can assist BabyCare in generating growth by increasing the number of distributors selling their products, with a long term objective of establishing the USANA brand throughout China. USANA is already working to license some of its products to BabyCare to enhance BabyCare's product line.
