Multi-level marketing needs better legal framework
By Dinh Dung - The Saigon Times Daily
HCMC – Although a legal framework for multi-level marketing is available, authorities and companies want it to be improved to facilitate this business field.
This view was shared by participants at a seminar organized in HCMC on Thursday by the city’s Department of Industry and Trade and Amway Vietnam Co. Ltd.
Multi-level marketing (MLM) has been present in Vietnam for over 10 years. The Government in 2005 issued Decree 110 governing MLM activities.
MLM, also known as direct selling, is a marketing strategy aimed at retailing goods via a multi-level network of salespeople.
Theoretically, products are directly distributed to consumers in this method. It eliminates the intermediary stage for developing a retail system, thus saving advertising costs and creating jobs for people, including many part-timers.
According to the Vietnam Competition Authority under the Ministry of Industry and Trade, the MLM sales force has grown by leaps and bounds in recent years, from around 235,800 in 2006 to over one million in end-2011.
MLM sales revenue amounted to around VND4 trillion last year, of which the city accounted for VND1.5 trillion.
So far, 77 companies have registered for MLM in the country, including wholly foreign-owned enterprises, and three of them have factories in Vietnam.