CNDSN July 20 news (direct selling 100) recently, China-Briefing (China clippings) published an article about China network marketing development speed is too fast to lack of trust and into the back of the market of many problems reported.
Multi level marketing (MLM), both direct marketing system is also a marketing strategy, the Direct Selling Company's sales force is mainly dependent on the independent distributor of different sales ability.
Independent distributors are not only selling the products, will recruit more distributors to join, the recruitment of sales staff is often referred to as "offline", direct salary plan and organization can be said to be very attractive, because it provides a need to invest large amounts of funds can be entrepreneurial opportunities.
The main characteristics of multi level marketing organization:
1, the Direct Selling Company will be based on the distributor's sales performance to the division level, according to the level of payment of wages;
2, the Direct Selling Company will require new joining the distributor to pay part of the franchise fee;
3, the organizers or operators will encourage members to invite more people to join, forming a multi-level relationship;
4, usually pay with the development of the assembly line, the number of relations;
According to past experience, a large number of Foreign capital company in China's direct sales market is very interested. However, it is disappointing that in 2005, the Chinese government promulgated the "direct prohibition laws and regulations", the regulations clearly pointed out that direct selling can be allowed, but the prohibition of multi-level marketing.
Even if direct selling is allowed, also must abide by several criteria, such as company must have a business license and must be recognized by the government of the direct selling license, salespeople need in advanced training and badges to prove his identity. The Chinese government will be banned because of the fear that the multi - level payment structure will make the organizers or top members obtain illegal interests.
In contrast, in Taiwan and Hongkong area, multi level marketing is a legitimate marketing practices. This is why people in these areas often become the jurisdiction of the district's sales representatives, and in the mainland, such as "legal" is also a problem.
Even if direct selling legislation, many multi level marketing companies are still running, which seems to be unable to change the facts. For example, such as the new group, a few years ago because of pyramid schemes by the Chinese government survey. Even so, as new still has an important role in the Chinese market.
We can understand that, in China, such as the new is not the only company to operate in this mode of sales. 3
(original title: foreign media: China's direct selling market to restrict more foreign investment to enter difficult)
Editor: small Shen