DEEJ(SZ:000423) Sou Hu Cai Jing·2026-02-19 10:06Core Viewpoint - The acquisition and evolution of the direct selling license by Dong'e Ejiao reflect not only the strategic choices of a single enterprise but also the profound changes in the industry from institutional arbitrage to value return over the past decade [1]. Group 1: Institutional Foundation - The issuance of the direct selling management regulations in 2005 marked the beginning of the legal framework for the direct selling industry in China, distinguishing between legal direct selling and illegal pyramid schemes [3]. - Dong'e Ejiao's direct selling license approval in 2015 occurred during a critical transition period for the industry, characterized by a shift from chaotic growth to regulated operations [3]. - The rigorous qualification process for obtaining a direct selling license underscores its significance as a testament to a company's brand reputation, product quality, and management system [3]. Group 2: Strategic Choices - Dong'e Ejiao entered the direct selling sector due to its need to diversify sales channels, as it faced a decline in revenue from traditional distribution methods [6]. - The direct selling model aligns well with the characteristics of Dong'e Ejiao's products, which require in-depth explanation and have clear repurchase cycles, making it suitable for face-to-face health consultations [6]. - The direct selling approach allows Dong'e Ejiao to enhance profitability while providing consumers with more accessible pricing, thus creating a win-win situation [6]. Group 3: Endowment Support - Dong'e Ejiao's unique brand heritage and ongoing technological innovation are key factors that enable its success in the direct selling arena [7]. - The company has established significant assets, including a national engineering research center and participation in the formulation of national pharmacopoeia standards, which bolster its confidence in entering the direct selling market [7]. - Dong'e Ejiao's strategic shift towards technology-driven growth has led to increased R&D investment, reaching 210 million yuan in 2024, a 27.63% increase year-on-year [7]. Group 4: Industry Changes - Over the past decade, the direct selling industry in China has transitioned from a focus on license acquisition to a more rational return to the essence of the industry [11]. - The industry has seen a decline in growth rates, with 13 licensed companies suspending or abandoning their direct selling operations between 2023 and 2024 [11]. - The future of direct selling is expected to evolve into a model centered on technology empowerment and community interaction, emphasizing the importance of creating irreplaceable customer value [11]. Group 5: Rational Examination - Despite obtaining the direct selling license, Dong'e Ejiao has not rapidly expanded its direct selling business, reflecting a cautious approach influenced by various external factors [14]. - The company recognizes the dual-edged nature of the direct selling model and has chosen to prioritize brand reputation over immediate sales growth [14]. - The strategic value of the direct selling license lies in its potential to facilitate deeper consumer engagement and future business innovations, particularly in the context of increasing health awareness [15]. Conclusion - The ten-year journey of Dong'e Ejiao's direct selling license represents a significant period of maturation for the Chinese direct selling industry and highlights the balance between institutional benefits and corporate endowments [17]. - The direct selling license serves as a baseline for compliant operations, a testament to brand credibility, and a reflection of the industry's return to value [17].