Three new challenges in multi-level marketing management

Illustration image. Source: internet

According to the Ministry of Industry and Trade, due to the complicated developments affecting social order in 2016 and earlier, until now, with the drastic and synchronous participation of functional agencies, multi-level marketing companies have controlled registration certificates.

Regarding the number of enterprises, compared with 67 enterprises at the beginning of 2016, by the end of 2020, only 22 enterprises with certificates of registration of multi-level marketing activities are operating legally (down 67%).

Notably, inspection, examination, supervision and handling of violations has been effectively implemented.

Since 2016, the Ministry of Industry and Trade has deployed 65 inspection and examination teams (then investigated and handled according to the provisions of the 2004 Competition Law), fined more than VND14 billion and revoked the license certificates of registrations of multi-level marketing of 24 enterprises.

However, the Ministry of Industry and Trade recognizes that the management of multi-level marketing in the 2021 – 2025 period will face three new difficulties and challenges.

Firstly, the handling of unauthorized multi-level business individuals and organizations is still not strong enough, so organizations and individuals still find ways to circumvent the law and defy legal regulations to gain illegal profits.

Secondly, illegal or  unauthorized multi-level marketing has attracted a large number of people to participate. Therefore, management agencies need to have many measures to propagate and disseminate knowledge and understanding about multi-level marketing to raise people's awareness more effectively.

Thirdly, unauthorized groups have used sophisticated and complicated operation methods, taking advantage of the network environment and e-commerce forms to call on participants in the name of business 4.0, digital technology.

Tracking, collecting information and documents to handle these groups is very difficult. While these groups operate without permission, they are not managed according to current specialized legal regulations. Therefore, the handling of these groups requires the participation of many management agencies from central to local levels.

The representative of the Ministry of Industry and Trade said that the Ministry will continue to promote and implement management measures to improve the effectiveness of multi-level marketing management in the 2021 – 2025 period.

This is shown by continuing to review and perfect the legal framework for  managing business activities in a multi-level manner in line with the actual requirements and development of the industry.

Along with that, it is to comprehensively raise the community's awareness of the law on multi-level business and other forms of taking advantage of illegal multi-level marketing, targeting a number of people such as the elderly, students, and women.

Apply information technology strongly and thoroughly in the management of business activities in a multi-level manner, aiming to maximize the use of information technology in management, saving time and resources for  both of regulators and businesses.

Another factor  mentioned by the Ministry of Industry and Trade is enhancing the responsibility and role of the management agency in each locality, especially the Department of Industry and Trade in the management of business activities in a multi-level manner across the country.