Guthy-Renker targets a billion new consumers as first major U.S. electronic retailer to enter China

Business Wire, Dec 10, 1996

PALM DESERT, Calif.--(BUSINESS WIRE)--Dec. 10, 1996--

First month's supply of product sells out

in 20 minutes on Shanghai TV

Having gained access to various Chinese goods since the inception of direct television (DRTV) 11 months ago, the world's most populous country has proven its desire for Western products following the launch last week of programming by Guthy-Renker, one of the world's largest TV response-driven companies.

Within 20 minutes of its debut on Shanghai Television, Guthy-Renker's inventory of PowerRider was met with a buying frenzy, resulting in the depletion of its entire first month's supply.

The venture, the only exclusive relationship between an American infomercial marketer and a Chinese Television station, was accomplished through a groundbreaking alliance with the Chinese Ministry of Radio, Film and Television (MORFAT) and an association with The Geneva Companies, a global consultancy which links corporations with Chinese ministries, commissions and enterprises.

Among the nation's eight main television stations, operated by China Central Television, Guthy-Renker programming will be broadcast by half of them by January. Initial response has exceeded expectations: Shanghai Television, one of the largest terrestrial stations in China, was forced to add an additional 20 telemarketing operators to handle the first days' flow of calls. Following the launch on Shanghai Television, the company will broaden its roll-out to stations in the cities of Dailan, Guang Dong and Tianjin.

"This venture represents the most ambitious and significant DRTV launch in China, a country clamoring for all things American," said Greg Renker, co-principal of Guthy-Renker. "We are fully aware of the challenges involved in reaching the Chinese market, and we are fully committed to the evolution and growth of this market."

Those challenges include reaching a country with few household telephones and few other consumer conveniences. The company's products will initially be available only by cash or C.O.D. and will be delivered by privately commissioned taxi companies, according to Renker.

In preparation for the launch, Guthy-Renker spent months establishing its corporate infrastructure in Beijing and stocking warehouses in the country's northern and southern regions. The company's investment comes in recognition of the communist nation's untapped potential; of 255 million of the world's 820 million TV households are in China.

The first three products available to Chinese consumers are the top-selling exercise machines PowerRider and Perfect Abs, as well as the Perfect Smile tooth whitening product. The infomercials, 28-minute shows originally produced in the United States, have been dubbed for local audiences and trimmed to lengths ranging from 10-28 minutes.

In addition to Western investment, the nascent Asian infomercial industry will benefit from education. This week, a direct response television conference was held in Hong Kong, at which time a delegation of Chinese television station officials, organized and sponsored by Guthy-Renker, educated the international audience about the developing Chinese direct response television market.

Guthy-Renker is the largest domestic producer of high-quality infomercials and products designed for home shopping and direct response television sales, with annual revenues in excess of $250 million. It is a founding member of NIMA International, formerly known as the National Infomercial Marketing Association. NIMA promotes the interests of all electronic retailers including infomercial, television shopping and short-form direct response companies as well as other interactive media marketers around the world. NIMA International elected Greg Renker as its chairman in 1996.

Guthy-Renker is based in Palm Desert and was co-founded in 1988 by Bill Guthy and Greg Renker. Guthy and Renker have been cited as among "America's Smartest Young Entrepreneurs" by Fortune magazine and received a regional "Entrepreneur of the Year" award from Inc. magazine. The company enjoyed a 100 percent growth in revenues in 1996, a year in which the company won six NIMA industry awards.

CONTACT: Guthy-Renker

Eytan Urbas, 415/474-0205

or

Baker/Winokur/Ryder

Larry Winokur/Steven Jensen, 310/277-6200