VietNamNet Bridge – Despite economic woes, sales via multilevel marketing in Vietnam have steadily increased with over one million people involved in network marketing.
According to the Vietnam Competition Authority under the Ministry of Industry and Trade, sales via multilevel marketing last year reached VND4.05 trillion, equivalent to some US$193 million, up 170% from the previous year.
Statistics showed that there were only around 235,000 people joining multilevel marketing organizations in 2006, and the number of participants increased by over 4.6 times last year to over one million.
Ha Thi Quynh Tram, chairwoman of the AmCham Vietnam Direct Selling Committee (AVDSC), told that Daily last week that although official statistics on this year’s sales of multilevel marketing companies were not available, the market had steadily grown.
Explaining the growth, Tram said that as the economy was in difficulty, many people were getting involved in multilevel marketing as a way of earning some money.
It is low investment costs, few risks and flexible time that have helped attract over 125,000 people nationwide joining direct selling networks last year.
Over ten years of presence in Vietnam, there have been 78 companies registering for the multilevel marketing business here, according to the Ministry of Industry and Trade.
By last month, 54 companies had been operational, with 13 foreign-invested ones. Meanwhile, other companies have suspended operations or had their licenses revoked.
Hanoi has the highest number of direct selling companies with 28 operational firms among 40 registered ones, while the respective figures in HCMC are 23 and 34 respectively.
According to the Ministry of Industry and Trade, 90% of such firms sell functional food which is followed by cosmetics, fashion products and home appliances. The number of products has also increased much in recent years with around 4,500 products going on sale last year.
Experts said that as the market would be further opened up under WTO commitments, there would be more companies joining the multilevel marketing market, especially those from foreign countries.
However, direct selling operations in Vietnam have left many scandals in the past. The most typical case is that producers require agents to obtain a certain sales volume, pay high commissions and even cheat customers.
At a seminar on multilevel marketing held last week by AVDSC, experts said companies needed to apply the code of conduct on business ethics in their operations.
The code of conduct, according to Tamuna Gabilaia, executive director of the World Federation of Direct Selling Associations, consists of three important parts, which are to protect consumers, protect distributors and solve complaints between companies.