We have a good presence really across the world. We're in 25 markets now. Many of our peer companies are in far more markets, so we still think there's some blue sky in front, but we've been pretty intentional and deliberate with how we've kind of approached that. And then, you know, I think, you know, particularly with COVID, health and wellness is very much at the top of mind for many and most of the consumers out there. And so we think the space in which we play provides many opportunities that we just need to structure and take advantage of. So let's touch on the business model, the direct selling business model at a really high level.
So when we look at it, we'd see probably five primary areas, and we've touched on this a little bit, but I'll go a little bit more in depth on these in the future slides. But active customer growth, so anybody who's purchased from us in the last quarter, that's who we consider active. And we think that is really kind of a key performance indicator for how the company's doing. That is the lead indicator that we have is how many consumers we have consuming and enjoying the USANA products. As I mentioned before, there's many benefits to the direct selling model. It's a word-of-mouth model. It supports kind of the social influencer and different social channels quite a bit. And I think people want to be part of a relationship. They want to be part of a community.
I think it's a great opportunity to go back and embrace that. Manufacturing, as I mentioned, both domestically here in the United States, we have a manufacturing center in Salt Lake City and one just adjacent to that building that does the foods. Our primary one does some skincare and our supplements. In Beijing, we have a manufacturing facility that does a wide range of products. We also have a small manufacturing operation in Tianjin, China as well. So I think we're well covered, and we like many of the aspects that manufacturing gives us. As I mentioned, we've been very keen on kind of the product quality, and we take a great deal of pride in that.
We've recently, and I'll touch on this a little bit, did a little bit of reorg with our commercial team to really go back and increase the cadence of innovation. We've always kind of rolled new products out, but we think we can go back and do a little bit better, be a little bit more impactful there. And so we're looking forward to some of those opportunities. And new market expansion and M&A are definitely part of our growth strategy going forward. New markets, we just opened India in late December. What we've said is that's going to be a small market, probably for a little bit of period of time here as we go back. It's a different way we've entered the market, so we think it's going to take longer to get traction. Like China, it comes with a lot of complexity, a lot of nuance.
It's a great opportunity, and I think great people and great entrepreneurs in that market, so that's exciting. Then M&A is something really over the last three or four years, we spend far more time than we're really having the company's history on those types of investigations and evaluations. We did a couple of small acquisitions in mid-2022 and continue to go back and evaluate a variety of different opportunities. So let's touch on the active customers real quick. So I would say we have two primary categories of active customers. One would be the associates who have some intent to go back and market and sell the products for a business. At least that's how they come into the business. And then we have a preferred customer who wants to consume the products but don't have any rights or privileges to go back and distribute the products.
Collectively, those are referred to as active customers. We have also been testing an affiliate program, which we have the numbers included in our associate program in a few markets in the U.S. and Canada and Mexico. And so we're learning a great deal from there and continue to go back and adjust that program and look to introduce that in a few more markets in the not-too-distant future. It's just a different way for an associate to go back and earn some compensation, maybe very transactional in nature. And so we see some opportunities there as well. As I kind of give a high level of kind of the overall kind of drivers of our operating leverage with the direct selling model, we really pay for performance. So we pay our associates on sales they generate in their sales network. And so it really is a pay on performance.
So that gives us the ability to go back and add many of the customers that are relatively low cost and pay really based upon the success of our associates out there. The incentives and commissions, as I just indicated, would be very aligned with our sales. And because we have this flexibility, and we're definitely placing some bets that aren't sure things that you don't have exact scale on, we tend to generate kind of pretty robust cash flow on a regular basis. And our ability to go back and expand in new international markets with fairly modest investments is something else that we've done. Even though we're in 25 markets, we still think there's some opportunity there. And there may be some variations of what we do just based on the regulations of the markets that we're evaluating.
So I think some good opportunity there in the direct selling space. As we move to evaluating kind of in-house manufacturing, as I mentioned, it's been key and important to us. We most recently added a foods manufacturing. You can see in the top right picture there where we do both protein bars, nutrition bars, and kind of dry mix drink production in that facility as well. So that's a great capacity to have. We manufacture about two-thirds of what we sell. And we believe, I think really across the board, that the manufacturing gives us a little bit more flexibility and adaptability than we have if we were relying on a third party. And we saw this through COVID a little bit. And the trade-off is maybe some third-party manufacturers out there have scale, but we're controlling the full quality process here.
It gives us to respond in a little bit more agile way than what we could with a third party. Quality, as I mentioned several times, is very important to us. And so as we look at our facility, we're very, if you walk through our facility, I think most people are very surprised with how clean it is relative to kind of what they see out there. And so we take a great deal of pride in adhering to all the quality standards out there and GMP and many other standards across different markets around the world as well. From a science standpoint (touched on it briefly), we really focus our formulation on looking at what we see in clinicals and what's proven to be efficacious from these studies. And so we have formulations from the latest science.
We have on-site R&D labs and facilities and QA labs, scientists, 60+ scientists on staff, and really go back and seek out kind of the highest quality raw ingredients that optimize some of the health benefits we see in these studies. And so this is something that the company's really done since inception. We're definitely positioned more on the premium end of the products, but I think there's a great value proposition on our products as we kind of tell the story behind them. One of the things we do, because the bulk of our marketing dollars are spent on paying commissions to our field, is we find different ways to go back and kind of build that brand and build that story with the company and its products. And so we sponsor many amateur, Olympic, and professional athletes, oftentimes with just a product sponsorship.
Sometimes there's some cash element to it. Oftentimes we'll go back based upon the athlete. We can go back and provide an athlete guarantee. I think many athletes are afraid to take products because of potentially testing positive for something. So we have an athlete guarantee we'll sign with them. Based upon where they're at and stuff, it'll just kind of give them some comfort level they can rely on what we're conveying. So this has been very well received by our associate base and our customer base as far as kind of a belief-building engagement to see these athletes relying on our products. As I mentioned a little bit earlier, we got into China in 2010. You can go back and see. Greater China encompasses Taiwan, Hong Kong, and Mainland China.
You can go back and see on that bottom section of the stacked bar graph. You can see China really growing pretty meaningfully as a percentage of total geographic sales. You can see the other entities. Americas and Europe used to be really foundational and still is foundational what we do. But relative to the size of China, from a percentage standpoint, it's just changed quite a bit over the years. So we see ethnic Chinese not only in Mainland China, but in many of our markets around the world. I think it's a group that just believes in supplementation. I think it's been a great relationship for us, and I think it's made the company a better company for us. Let's talk a little bit about kind of the direction we're going. We'll kind of give you some high-level parameters here.
So as we look at our growth strategy, active customer growth is, we talked earlier about that being a key performance indicator. The main way that we grow and build the company is not through wallet share, right? It's not through a variety of things. It's really through the number of individuals consuming or taking our products on a regular basis. That's how we've grown sustainably over the years. And so that's a key focus area. I would say in this area, we spent a great deal of time over the last maybe three to five years focusing on preferred customers. And you're going to see a little bit of pivot with some new leadership in the group. And I think it's the right direction to go to focus more on the associate and associate-first mentality because they're really kind of that touchpoint with all these introductions out there.
We got to make them kind of a primary focal point of our interaction and how we manage this going forward. We're quite excited about that opportunity and what that can mean to the company going forward. International expansion, as we entered China through an acquisition. That's always an opportunity to go back and do that through an acquisition. India, we did not. That's the only market we've done like that. We entered India in December, as I mentioned. I think there's opportunities in many of these places around the world to go back and broaden out where we operate. That continues to go back and be an opportunity for the company.
We continue to go back and evaluate kind of things that haven't been typical direct selling just so we can go back and expand our core competencies and leverage some of our capabilities internally. I think it'll allow us to diversify the company a little bit. I think we see great opportunity there in just trying to find the right fit. We continue to focus really on kind of the health and wellness space as we look for opportunities there. Let's talk a little bit about kind of this active customer growth. Associate engagement, going out, and what we've seen is many of our leadership team have been traveling as soon as we could coming out of COVID, have been on planes and doing this other stuff, and now engaging with our associate leaders in many of these markets.
We think there's a great deal of opportunity for training and coaching and leading and listening to these folks, having events where we can go back and interact. We just had two successful events in the first quarter, one in Malaysia for our Asia-Pacific region, where we had pretty close to 8,000. And in China, where we had two separate ones back to back that were about 17,000 folks that attended our China National Sales Meeting. We continue to plan on doing this. We're trying to localize and regionalize things to a greater extent and have things be more relevant to those marketplaces. You'll see incentives and different trips and stuff that really fit kind of that mode and kind of what we're hearing from our leadership in each of those markets and regions.
We continue to invest heavily on an ongoing basis in technology. So these digital investments and anything to go back and help make the job of these associates easier from tools and techniques just to access and presentation content. And so you see this on a regular basis. We're actively listening to feedback from them. We're tracking the orders. When we hear complaints or something like that, we can go back and track these orders and see where it's happening and be very proactive in how we're addressing these things and really try to go back and expand kind of the addressable market for each of these individuals with tools and access that we give them.
We think these investments, although they're not kind of a light switch as far as generating investment, I think you'll gradually and systematically see the folks using those tools and leveraging those in the future and make their job a little bit easier. We've also done a little bit of structuring change with how we organize kind of our product teams. They're more in these agile teams now. We believe that's going to help us move quicker, come up with better ideas, and just have a higher cadence of innovation than what we've had historically. I think we've always done a good job. I think we just need to enhance that and kind of really and kind of push on that. So we're excited about what we're seeing there, and there's some opportunity there. We think all those activities will help really lead and support customer growth.
As I've mentioned a few times on the international expansion. As we look at some of these kind of global markets, I think particularly in the vitamin supplement space, you can go back and see that expanding. People are purchasing at different realms and stuff. I think those who operate in the premium space like we do is a piece of that. But it's something that we feel pretty strongly is what's really adding kind of that substantive health benefit to someone who takes the products on an ongoing basis. So we're in 25 markets. A little bit more than 90% of our sales are generated outside the U.S. That creates some wonderful dynamics with different cultures and different opportunities, creates some challenges when it comes to currency.
We manufacture out of our U.S. operation for every market around the world, with the exception of Mainland China. India does some of their own manufacturing as well. You get a little bit of dynamic when it comes to the exchange rate. We look forward. Once again, I think the thought and kind of the awareness of what they take in their body and their activities and their exercise and their sleep habits, all these things feed into kind of a healthy and happy individual. We think we can play a part in contributing to that. As we look at kind of a little bit outside of kind of our typical channel, what are we looking for, right? These are the primary focus areas, kind of those holistic approach to health and wellness.
How can we go back and do things that are additive to that? As I mentioned, manufacturing and kind of controlling a little bit of our destiny there. So that vertical integration is something that we've actively looked at on a regular basis and important to us. Really building out, maybe you find a product or some different core competencies that create a little bit of a competitive moat. And those things definitely appeal to us. As we seek to go back and look into different markets, sometimes doing that via an acquisition may make a great deal of sense like it did in China. And then just really looking at channel diversification or diversification of the revenue stream is something that appeals. And I think we learn a great deal with folks with some different competencies in those areas. And so this is kind of a roadmap.
We look at a variety of things, but it truly is focused on the health and wellness space. Let's kind of just do some quick highlights, and let's look at the balance sheet. As I mentioned, we got a really strong balance sheet. Our cash, you can see, is pretty much unencumbered there. We don't have much debt. We haven't carried much debt. And I'm not saying we won't for the right opportunity. I don't mind putting a little bit of leverage on the balance sheet. But we've run the company well, and it gives us a great deal of flexibility kind of at this time in kind of the operating environment. I think we're pretty grateful for having kind of run it like this. But we definitely look for opportunities and are not afraid to go back and deploy that capital.
Our cash flow, we've seen some drop in the percentage of cash flow. We've seen some margin compression with a little bit softer top line in the last couple of years. As we've seen some inflationary pressures, we haven't moved our pricing along as quickly as what inflation's gone up. I think we've been well below kind of what we've seen with many of our peers in the marketplace. We still see sensitivity even with the small movements we have. So we've been very cognizant to talk to our sales leaders in each of the markets. We're very intentional with how we approach these processes. We continue. We've obviously stripped some cost away, but we've repurposed a great deal of cost to go back towards things that we think will be a catalyst long-term to sales growth.
And we'll continue to go back and think long-term in that capacity. So I think good opportunities going forward. Capital allocation priorities, as I've kind of alluded to at least, is organic investing. Continue to go back and invest in the direct selling business with things that are going to generate a return. We think that's critically important. We continue to go back and evaluate a host of opportunities in the M&A front. We'll continue to do that. We think there's some interesting ideas just trying to go back and find it for the right investment size and kind of multiples and valuation there. And then after we've exhausted those and really don't have much on the horizon if that happens, then we've been pretty proactive with how we've looked at share repurchase.
Typically, we'll take enough out in share repurchase to offset the impact of dilution from the internal equity program. Then after that, it really kind of factors in relative to different opportunities that are on the table that we evaluate. So this is a discussion that's had with the board on a regular basis and with Jim Brown, our CEO. And so these things are important. We continue to go back and have these conversations. But this is kind of the way we're approaching the way we view the priorities. And I think with that, I don't think we're going to go into this. There's some quarterly performance numbers in the appendix to the presentation you're welcome to look at. But with that, Andy, Anthony, I'll turn it back over to you.
All right. Well, thank you very much, Doug, for the terrific overview. As a quick reminder for those in the audience, if you do have a question, you can type it into the bottom of your Zoom screen in the Q&A function. We already have a few questions in the queue. I'll start with those here. First, overall, it seems like there is a trend towards more low-carb lifestyle, ketogenic. It seems to be accelerating. What are you guys doing to address these kinds of niche markets?
Yeah. Like I said, we built out a food facility here. And so we think there's a lot of opportunity towards leading a healthy lifestyle. I think the GLP-1 has scared maybe a lot of people away from making some heavy investments there because I think they perceive a lot of folks going there. But in the past, we've had products that we've produced and put out there that have been low glycemic and really go into that type of mindset. And so it's still top of mind for us. And we think there's a great deal of opportunity with kind of the food activities to be part of that kind of holistic approach. And so I think we agree. I think just simple protein in there where people can augment with stuff they want, whether it be greens or fruits or whatever they want.
We have some of those things. We got to do a better job getting those things out there. But I think we're positioned now with the capacity and with the manufacturing to do that. These product teams, I think you'll probably see a lot more coming out on some of these fronts as well.
Gotcha. Okay. Then switching gears, how do you guys think about the political tensions between the U.S. and China? How is that impacting your business strategies and kind of thinking longer term about the business?
Yeah. It's definitely something that we've definitely evaluated on an ongoing basis on risk. It'll provide a little bit of clarity, and then I'll kind of respond to the question. So with China, for the most part, we source in China what we make there. So there's not a great deal of cross-border activity going on. But I think without a doubt, I think we've seen both the governments back and forth with a little bit of saber rattling and maybe targeting some companies that are more prominent names. We're not the top name out there. I think we work very hard to have ongoing interaction with the government and really be long-term in our thinking in that marketplace and really be prudent.
One of the things that you've had to do through the 100-day review that China did as a government in 2019 and even before then, and now you have to have good government relations. You have to listen to what the government's telling you. It's a different approach than what we see in the other markets. But you do have to have a long-term mentality. And even though there's nothing you specifically have to do, they're keeping track of your social scores. What are you doing to benefit the community? And so you have to undertake some of these long-term activities and be a good community partner in that market. And that's expected. And you have ongoing conversations. You listen to what you're being told, and you adjust and adapt.
We found kind of the interaction reasonable, and it allows us to go back and be a little bit proactive in how we approach it. It's something definitely that we pay attention to and we see, and definitely some risk element there. We continue to believe it's a great opportunity in the market moving forward. There is. I mean, we definitely pay attention to some of the risk element there. To date, it really hasn't had much impact on us, but it's something that we definitely have to keep in contact and keep adjusting accordingly as we kind of see events unfold.
Gotcha. Just to follow up as far as on China. As far as the products that are made in China, they're all sold in China. Anything there to call out as far as any headwinds with the manufacturing of products, or has that been okay? I was just curious about that.
Maybe clarify a little bit, Anthony. I want to make sure I'm answering. I didn't.
Yeah. I mean, just wondering if you have seen any headwinds with respect to production of your goods in China. Have there been anything to call out there, or it's just more or less smooth sailing?
Yeah. I think there's always adjustments. And I think you see the regulatory environment in any market. I don't think China's too much different there. There's been regulatory changes with process to go through. It's a pretty long lead time to get products approved in China. And so you always have to have things in the pipeline. But our group does a great job manufacturing over there. And we have some partnerships with different firms over there where we don't make our own stuff. And so I think we've been able to adjust. And I think our team on the ops side has done a great job there.
Gotcha. Okay. All right. So you guys operate in 25 different countries. So there's all these different regulations throughout it. So when you look at the markets that you operate in, which ones are kind of the most strict in terms of regulations? And maybe just give us also some flavors to which ones would be less regulated. Or are there any? Also, is there any pending legislation out there that you're aware of that could change in any of the markets that you're operating in?
Yeah. I think it's been like this all the time. It's always a fluid environment. There's always something in place. I wouldn't say there's anything terribly noteworthy. China, just because of the magnitude of the market it is for us, and I think their regulatory environment, and you hear whispers and some of this other stuff, there is no formal structure right now. I think we get a sense for companies that are doing the right way. Direct selling may get a bit easier from a regulatory environment. I think on the product side, I think many of the markets you have we manufacture for Australia, but I would say their regulatory body coming and reviewing what we're doing is probably as stringent as we see out there. Just trying to get through kind of the lengthy timeline to get products approved is kind of an interesting dynamic.
But I think you see the markets more and more kind of continue to go back and just update their protocol and do this other stuff. And I think with the way we're run as an organization, we're very intentional, very deliberate with how we approach it. But I think we're well-positioned. And I think we've just kind of handled it as a normal course of business. But if we see anything that's noteworthy or impactful, we'll definitely be sure to talk to it.
Gotcha. And then we have a couple of questions here about just your overall market share. I know it's a fragmented industry. Maybe if you could just comment on what your market share is, maybe at least in the big major markets. And then as far as what your strategy is to gain share in sort of those untapped markets?
Yeah. I would say the strategy to go back and address is what we covered in the presentation. It really is that associate-first mentality, the engaging, increasing the cadence of velocity of product innovation, and really kind of being mindful of that thing and just creating a bunch of tools and ability for our independent associates to be successful in their endeavors. I think that's really the strategy. I think our penetration in the vast majority of markets where we operate is very low. We have gotten to a pretty prominent position in some of the Southeast Asia markets like the Philippines. We're still a prominent player in the Philippines, even though our market's a little bit smaller than what it's quite a bit smaller than where we have been in the past.
I would say we're typically under, in the larger markets, under that 2%-3%. I think there's a great deal of opportunity and a great deal of blue sky ahead to make some inroads there. I think there's some things that we talked about in the presentation and really being better at telling that product differentiation story and delivering on that, I think, are some of the biggest opportunities we have.
Anthony, yeah, just to maybe add a little bit more color there. So just using the Euromonitor market data, specifically looking at vitamins and dietary supplements. In China, we're the ninth largest player there. South Korea were the ninth largest. Malaysia were the third largest, and the Philippines were the third largest. And those have been pretty consistent over the past few years.
Yeah. I would say when we go back and look at some of the competitive environment, even with that share, there's a lot of small players out there. So it's a pretty competitive marketplace where that volume spreads. You don't see kind of a real dominant player out there. So it continues to be a pretty competitive marketplace.
Gotcha. All right. So it sounds like there's a lot of opportunity for sure. And I know we're out of time, but just wanted to squeeze one last question that we had here. Just in terms of as you look at the business for the next 12-24 months, what are some of the biggest swing factors that investors should be looking out for?
Yeah. I think really the traction on the active associate accounts. As much as we focus and much the consumer continues to be of top importance to us, it's really the associates out there in our business model that are telling the story and approaching them. And those numbers and how well we execute on these plans to go back and build those numbers and make them the centerpiece of what we're doing. I think that's key. I think you'll see just because we're controlling the product innovation, and you'll continue to go back and see that broaden out in the execution on that. But those would be probably the two things. I think that cadence of the product innovation and those active associate accounts would be, I think, kind of the lead indicators you'd pay attention to.
Gotcha. Okay. Well, we already are two minutes over our allotted time. But thank you very much, Doug and Andrew, for participating in our conference. Thank you also, everyone, listening in and asking questions as well. So we'll wrap it up here. Everyone, have a productive day. Thank you very much.
Thanks, Anthony.
Thank you.
Take care. Thanks.