Direct Selling Industry: The Journey to International Standards

(Chinhphu.vn) - After more than two decades of development with many ups and downs, the Vietnamese multi-level marketing industry is entering a turning point when the concept of "direct sales" is officially legalized. This change is not only a step forward in the legal framework towards international concepts and practices, but also opens up opportunities to strengthen market confidence and elevate the sales industry with a long history of development and a modern, advanced business model worldwide.

After more than two decades of development with many ups and downs, the Vietnamese multi-level marketing industry is entering a turning point when the concept of "direct sales" is officially legalized.

Continue to contribute more than 2 trillion VND to the state budget

Although the number of licensed businesses has continuously decreased in recent years, the multi-level marketing industry in Vietnam has still recorded stable development, with basic indicators maintaining reasonable growth.

According to the Multi-level Marketing Management Board - National Competition Commission ( Ministry of Industry and Trade ), up to now, the whole country has 16 enterprises granted multi-level marketing registration certificates, a decrease of 4 enterprises compared to the beginning of 2024.

Enterprises withdrawing from the market include: Vietnam Diamond Lifestyle Company Limited (license revoked), Sun Driver Company Limited (self-ceased operations), and two other enterprises due to expired certificates.

In 2024, the industry will achieve total revenue of VND 16,206 billion, with nearly 700,000 participants and contribute VND 2,262 billion in corporate income tax to the state budget.

Sharing at the conference summarizing the activities of the Southern region's industry in 2024 recently held in Ho Chi Minh City, Mr. Trinh Anh Tuan - Chairman of the National Competition Commission (Ministry of Industry and Trade) - emphasized: In 2024, most multi-level marketing enterprises will be profitable, some enterprises will even maintain growth in revenue, contributing to creating many jobs and income for people. In addition, these enterprises also actively participate in volunteer activities, contributing to community development.

The above achievements are the result of synchronous and effective coordination in state management, especially the leading role of the Ministry of Industry and Trade in coordinating and supervising multi-level sales activities, along with raising awareness of law compliance of enterprises. In addition, the authorities, especially the Ministry of Industry and Trade and local Departments of Industry and Trade, have made continuous efforts to build a solid legal framework to protect consumer rights.

New legal framework: Expanding and defining "direct sales"

An important step forward in completing the legal framework is the promulgation of the Law on Consumer Protection in 2023 and Decree 55/2024/ND-CP guiding its implementation. Notably, the 2023 Law has for the first time clearly defined the concept of "direct sales" and included "multi-level marketing" as part of the scope of this concept.

Specifically, according to Clause 7, Article 3 of the Law on Consumer Rights Protection 2023, direct sales are defined as the act of business organizations and individuals proactively approaching consumers, introducing products, goods, and services for sale, and providing them to consumers, including the following forms:

Firstly, door-to-door sales is the activity of selling products, goods, and providing services at the consumer's residence or workplace;

Second, multi-level marketing is the activity of selling goods through a network of participating individuals with many levels and branches, in which participating individuals receive commissions, bonuses and other economic benefits from the results of selling their own goods and those of other individuals in the network;

Third, sales not at regular transaction locations are activities of introducing and selling products, goods, and providing services at locations that are not fixed retail locations for products, goods, or introducing and providing regular services.

This is an important development in legislative thinking, as the scope of regulation does not only focus on "transaction results", but also extends to the way consumers are approached. This perspective is consistent with modern legal trends in the EU, Japan or Korea.

The introduction of the concept of "direct sales" into the law with three specific forms has created a clear legal foundation. Thanks to that, law enforcement agencies such as market management and People's Committees at all levels have a specific basis to identify and effectively handle violations. Enterprises are operated within a transparent and standard framework, minimizing legal risks during operations. At the same time, consumers can also easily distinguish between legitimate business models and disguised and fraudulent forms, thereby better protecting their legitimate rights and interests.

The legal transformation also goes hand in hand with efforts to reposition the industry's image. It is expected that at the 4th Congress of the Vietnam Multi-Level Marketing Association (2025-2030), the Executive Board of the Association will vote and submit to the Ministry of Home Affairs for consideration to change the name to the Vietnam Direct Selling Association, reflecting a clear direction in building a new identity, in accordance with the codified legal framework.

In fact, multi-level marketing or more broadly direct marketing is a model that has been recognized and protected in many countries, and is also one of Vietnam's commitments when joining the WTO. In the world, this model has a history of more than 60 years, popular in developed countries. This is a retail channel that directly connects manufacturers and end consumers, and at the same time pays a portion of income for individual marketing activities based on actual business performance.

The first legalization of the concept of "direct sales" in Vietnam not only contributes to improving management efficiency but also clearly demonstrates progress in the process of deep integration into the global economy. At the same time, this also raises expectations for a fair and transparent market, where consumers are protected and sustainable business development is recognized. Thereby, Vietnam increasingly affirms its position as an attractive investment destination for domestic and foreign investors.

Source: https://baochinhphu.vn/nganh-ban-hang-truc-tiep-hanh-trinh-di-den-chuan-thong-le-quoc-te-102250716093923796.htm