On 7 August 2006, Nu Skin Enterprises announced that it has received official notification that the company has received approval from the Chinese Ministry of Commerce to commence direct selling activities in Mainland China. As one of the earliest international companies to be granted a direct selling license, Nu Skin Enterprises will begin adding direct selling to the retail business model it has pursued in China since 2003.

Nu Skin Enterprises is honored that the Chinese government has granted us authorization to conduct direct selling in China. We respect the work completed by Chinese officials in establishing a framework that enables the Chinese population to take advantage of the benefits of direct selling. We believe the government's approval of our application recognizes Nu Skin Enterprises as an industry leader and is a reflection of our significant investment in China over the past several years, our conservative business approach that is focused on long-term success in the market, and our willingness to abide by applicable regulations.

The licensing process included a thorough review of the company's operations. With the Ministry of Commerce approval, Nu Skin China is authorized to initiate direct selling activities in our home base of Shanghai, which we will begin in the fourth quarter of this year. We will then move forward with the provincial license approval process as we begin introducing our direct selling operations throughout China in early 2007.

Key Advantages Brought by Direct Selling License
The direct selling license provides Nu Skin Enterprises with four key advantages. These benefits include: 1. the ability to begin selling away from our approximately 160 fixed retail locations; 2. the opportunity to engage an entry-level, non-employee, part-time sales force; 3. the establishment of a level playing field on which to compete with other approved direct selling entities in China; and 4. the benefits that come from having the government's 'stamp of approval' on our business model. These advantages will ultimately benefit our direct selling representatives by providing them with additional rewards and tools to support their selling efforts. Additionally, our customers will enjoy the benefits of our direct selling model with easier and more convenient access to the more than 120 innovative products we offer.

In addition, Nu Skin Enterprises would like to extend our sincere appreciation to you and your sales organizations for your support and patience as we have worked through the regulatory process of becoming an officially approved direct selling enterprise in China. Many of you helped Nu Skin Enterprises get its start in China and we are grateful for your continued support and hard work.

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