MUMBAI, 11 July 2014: Welcoming the Union Finance Minister Arun Jaitley’s announcement about proposed amendment to the Prize Chits and Money Circulation Scheme (Banning) Act, 1978, direct selling company QNET lauded the forthcoming clarifications and called for setting up a regulator to monitor the business.
Mr Jaitley said in his budget speech: “As part of the legislative initiatives under financial sector reforms, it is proposed to bridge the regulatory gap under the Prize Chits and Money Circulation Scheme (Banning) Act, 1978.”
“This step is expected to facilitate effective regulation of companies and entities which have duped a large number of poor and vulnerable people in this country,” Mr Jaitey said.
Appreciating the initiative Mr Zaheer Merchant of QNET’s Corporate Affairs, said that the direct selling business, unfortunately, was being clubbed under the Prize Chits Act due to certain misconceptions.
“The amended Act will hopefully take care of this, clarify the differences and encourage genuine direct selling as opposed to other forms of schemes,” Mr Merchant said.
Direct selling, he said, generates employment, encourages self employment, cuts down marketing and promotional expenses, apart from contributing to the exchequer. The need of the hour, therefore, is to formulate clear cut laws to govern the MLM and direct selling industry in India.
Mr Merchant pointed out that other fast growing economies such as Thailand, Malaysia, Indonesia, Vietnam, Taiwan and Singapore have a specific statutes that regulate, and more importantly, facilitate direct selling.
“We are confident that the government will consider relevant legislation from other countries in reaching a fair and just conclusion and legislation here, to ensure equity and business interests are best served. We are happy to assist in any way we can, as I am sure will others in the industry or other industry bodies in other legislated markets. A specific regulator, like an ombudsman, for instance, would also be useful in matters of mediation or review,” he said.
Globally, Direct Selling is an approximately US$154 billion industry with more than 91 million people involved it as distributors of a wide range of products and services. The socio-economic impact of this industry is well documented in many countries especially in promoting self-employment and reducing unemployment.
Mr Merchant said direct selling may be lucrative, but it is also a tough business. “Right from the start, genuine businesses will tell you that the results happen only if you put in the time and effort. “
“Any company that promises you an easy way to riches should be regarded with caution. QNET for example, has a detailed earnings disclaimer available on its website and marketing materials,” he said.
Pyramid or Ponzi schemes, he said, have no legitimate products or services. “Good direct selling companies dedicate substantial resources to research and development to create quality products that are of actual use or value to people. QNET offers more than 30 different products under nine different product categories.
“Serious direct selling companies don’t allow pure recruitment for income or simply reward participation”, Merchant explained.
It is in this context that India would be best served with clear-cut laws to govern the genuine direct selling business and not to simply enjoin it under the Prize Chits and Money Circulation Schemes (Banning) Act, he added.
QNET is one of Asia’s leading Direct Selling companies with a dynamic online shopping and business community comprising around seven million customers and independent distributors around the world. The company offers an entrepreneurial network marketing business opportunity and a portfolio of lifestyle products that have been developed to enhance the lives of its customers through innovation, wellness and luxury.
Established in Asia in 1998, QNET utilises the direct sales business model on a proprietary eCommerce platform to market and distribute its exclusive products. The company specialises in everyday, consumer brands as well as high-end luxury goods.
QNET is a member of the Direct Selling Association in Malaysia, Singapore and the Philippines.
Company Name: QNET
Contact Person: Ramya Chandrasekaran
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Address:Level 7, QI Tower, Block C, PJ8, No. 23, Jalan Barat, Section 8
City: Petaling Jaya