Multi-level marketing sector sees drops in participants, revenue

Multi-level marketing sector sees drops in participants, revenue

There are 16 licensed MLM firms as of the end of August, one of which is in the process of closing down.

The multi-level marketing (MLM) sector contracted in the first half of this year, as both participants and sales declined significantly. —  Photo thoibaonganhang.vn

The multi-level marketing (MLM) sector contracted in the first half of this year as both participants and sales declined significantly, according to a report from the National Competition Commission.

There are 16 licensed MLM firms as of the end of August, one of which is in the process of closing down. The number of participants fell by 13.4 per cent to 634,567 while revenue dropped 9 per cent to VNĐ7 trillion (US$265 million). New sign-ups were at 101,876, outpaced by contract terminations, which totalled 130,893.  

Five major players — Herbalife Vietnam, Amway Vietnam, Care For Vietnam, Tiens Vietnam and Unicity Marketing Vietnam — held a market share of 93 per cent, with Herbalife alone earning more than VNĐ4 trillion in revenue, or 53 per cent of the market’s total.  

Sales mainly came from functional foods and cosmetics, accounting for 92 per cent of total revenue.

Around VNĐ2.6 trillion was paid in commissions and bonuses, equivalent to 37 per cent of revenue.

MLM companies paid VNĐ1.3 trillion in taxes to the State in the first half of this year.  

Bizhub