American multi-level marketing firm Amway Vietnam said the Vietnamese market was full of potential for direct selling.
“We highly appreciate the valuable guidance and support from various government agencies, which has helped us set up our long-term business orientation in Vietnam,” Amway Vietnam CEO How Kam Chiong told an MLM workshop in HCM City on August 16.
The subsidiary of $8.4 billion Amway Corporation from the US, currently has manufacturing facilities in Vietnam, the US and China. The Vietnam facility, located in the southern Dong Nai province, was inaugurated in October 2007.
Chiong said his $14. million company was operating its offices, regional distribution centres and training centres in HCM City, Hanoi, Hai Phong, Can Tho, Danang, Vinh and Dong Nai. It currently has over 200,000 distributors in almost cities and provinces throughout the country, where direct selling, is legal.
In addition to Amway, the two other foreign multi-level marketing firms operating factories in the country are Avon Vietnam and Tien S.
Currently, the five direct selling firms with the highest sales revenue in Vietnam were Amway, Herbalife, Vision, Oriflame and Aloe Vera, said Phan Duc Que, head of the Ministry of Industry and Trade’s Unfair Competition Investigation Board.
He told the workshop that the five MLM firms with the biggest distributor force here were Aloe Vera, Amway, Oriflame, Avon, and Herbalife.
Despite facing frequent criticism and being a target of lawsuits, multi-level marketing is booming in many countries, with over 30,000 companies using the direct selling. According to a recent study by the World Federation of Direct Selling Associations, the number of direct sellers has reached 88 million people, and the industry creates about $141 billion in annual sales.
Que said multi-level marketing firms in Vietnam had to make registration with authorities and observe relevant laws and regulations. This year, Vietnamese police have discovered two fraud cases from Diamond Invest and Muaban24 Online Trade and Training.
Police have just arrested managers of Muaban24 across the country.
The Muaban24 network has about 120,000 members in more than 30 provinces and cities who joined the network to trade online. People are invited to join this online market and are promised hundreds of millions dong in monthly income for recruiting new members to the network.
Que said the Vietnamese authorities handled two multi-level marketing fraud cases in 2007, nine in 2008, four in 2009 and 2010 each, and one case last year. The 2011 total number of direct sellers in Vietnam exceeded one million.
He said Vietnam still saw shortcomings in the sector such as ones in business development, distributor training, rules of conduct and regulations.