Direct selling (DS) is a fast growing industry that has started and immensely thrived with the rapid growth of the internet and has contributed fundamentally in enhancing the economy of several countries. Zaheer Merchant Director of Corporate Affairs in QNET, a world leading company in direct selling, talks about this promising industry with great zeal saying that many countries recognize the direct selling industry as a major economic contributor.
Merchant takes Malaysia, where QNET’s operational headquarters are located, as an example. “The direct selling industry generated around 1 billion USD in revenues in Malaysia last year and the government has acknowledged the contribution such industry is making to the local economy and society by providing people with an opportunity to own their individual businesses” he said.
While many countries such as Singapore, Hong Kong, Vietnam and Philippines have taken steps to regulate such industry in order to pave the way for direct selling operators and prevent fraudulent actions, Egypt still does not have any laws to regulate the direct selling industry. Merchant comments on the importance of having regulating laws for direct selling saying that for such industry to thrive it is essential to have laws that regulate it and protect it; he emphasized that his company is willing to cooperate with concerned parties in Egypt on getting such laws.
“While the US Federal Trade Commission introduced general regulations to determine business standards for direct selling companies more than 30 years ago, there is no one set of laws for every country. Bodies such as the Direct Selling Associations in various countries work hand in hand with concerned parties on setting basic codes and regulations that suit each country’s economic environment”, added Merchant
Merchant further believes that every company should have proper terms and conditions between it and its distributors and then there must be terms of sale between the customer and the company which regulate the terms of sale and consumer related aspects. “Clear guidelines on ethics, income statements to prevent misleading statements or promises, privacy policies are all some of the nature of documents which individuals should look out for” asserted Merchant
The introduction of such laws is very important – according to Merchant – because they not only will pave the way for direct sellers but will also help manage and control illegal pyramid schemes. “Without such laws fraudulent distributers will find their way and scare people off legitimate direct selling operators as there are questionable practices which have unfortunately led people to have bad experiences with particular companies. This causes them to be wary of any company that claims to be a direct selling company and a negative impression is created in the mind of the public about the industry itself. That’s why QNet regularly tries to publish articles and provides many videos and materials to help create awareness about this industry and the positive impact it has had in the lives of many people.”, presaged Merchant
Awareness rising is also very essential, it is very important that people learn how to differentiate between Legitimate direct selling and illegal pyramid marketing, continues Merchant
“It is difficult to comment on the legal difference from a general perspective since different countries define it differently. But the fundamental difference that separates legitimate direct selling companies from illegal pyramids has to do with products and the payment of commissions for sales of products, never on recruitment or anything else. Legitimate companies offer high quality products and services that consumers find useful, valuable training and development and encourage good behavior within the industry.”
Companies also need to take steps in order to fortify its work against this illegal business, highlighted Merchant. QNET for example, he says, has partnered with a local business to establish an agency for after sales service, customer support and warehousing of its products to ensure it can support its distributors in Egypt much more efficiently. “We also pay all the relevant taxes for importation of products, and substantial amount is paid in import duties in Egypt alone. We, in addition, regularly conduct training programs for our distributors to reinforce QNET’s professional code of conduct and to provide knowledge about the company’s products and business opportunity.” Merchant confirmed.
Merchant, finally, expressed his hope that Egypt would soon become the equivalent to Malaysia, Singapore or Hong Kong – good examples of mature and well regulated direct selling countries – within the Middle East/North African regions as a trailblazer for the industry.
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“CC Plus” Media Consultant for QNET
Lamia Kamel: 01001010551
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