True Potential For Direct Selling In India Is Yet To Be Realized, Says Trevor Kuna, Global CEO of QNet

QNET has always recognized the potential of this market. Despite multiple hurdles over the years due to lack of legislation and awareness that has caused us a great deal of challenges impacting our reputation negatively, we have stood by our commitment to our distributors in India, Says Trevor Kuna, Global CEO of QNet in an interview on the Direct Selling Industry and QNet’s commitment to the government’s ‘Make In India’ initiative

 What is the current status of QNet in India and do you see a revival in the Indian market? 

Since the Indian government has just introduced new guidelines for the direct selling industry, this is an exciting time to be here in India.  A report from the World Federation for Direct Selling Associations (WFDSA) shows that India is now part of the ‘billion dollar club’ in the direct selling industry having generated approximately USD 1.18 billion in revenues in 2015.

QNET has always recognized the potential of this market. Despite multiple hurdles over the years due to lack of legislation and awareness that has caused us a great deal of challenges impacting our reputation negatively, we have stood by our commitment to our distributors in India. I believe that the true potential for direct selling in India is yet to be realised. India is one of our top 5 markets and we are here for the long term, and seek a sustainable future.

Thanks to the new Direct Selling Guidelines, we are confident that the overall business environment will improve, making it viable for direct selling companies and direct sellers to do fair business, and in the long run ambiguity surrounding this industry will finally be clarified.

We are also aligned with the “Make in India” initiative and support several SMEs in India who develop exclusive products for us. Around 70% of our product portfolio comprises products made in India. Our product development team is already working on sourcing and introducing at least 8-10 new products the next financial year.

You have been associated with QNet in various capacities including as Chief Marketing Officer. As CEO what are your priorities and expectations?

 I began my stint in QNet in the creative department in 2008 and was fortunate to have been given numerous opportunities for growth through experiences in many cross-functional areas. That’s the wonderful thing about QNet. It doesn’t matter what your background or qualifications are; if you show interest and are able to add value to something, you can shape your career any way you want to. In addition to being a part of the creative, marketing and communications department, I have been out in the field interacting with distributors as part of the business development division. I have worked on partnerships and licensing, e-commerce and digital transformation, and even international operations.

This diverse experience in multiple areas gave me a unique perspective and allowed me to identify areas of opportunity for the company to embark upon. My first priority as the new CEO of QNET is to focus our efforts on building a compelling product concept that follows our philosophy of Absolute Living. In essence, the philosophy brings a holistic approach to living a healthier life through clean water, healthier skin, nutrition that keeps you healthy at the cellular level and personal development courses and books to help you grow as an individual. In order for us to achieve the vision, we have strengthened our global training division to ensure our Independent Representatives understand what true health is, confidently deliver that philosophy to their customers in India and around the world, while at the same time, understanding and living out their responsibilities as an Independent Representative of QNET.  To remain competitive, we are looking to innovate our Home Care, Personal Care and Nutrition lines, bolstered by our online learning platform.

Having been to India on many occasions and having interacted with thousands of distributors at our events, I can say with confidence that we have something unique: a committed, dedicated and loyal group of people who still stand by us despite all the challenges and believe that we will get through this together and emerge stronger than ever. That energises me on a daily basis to ensure we focus on keeping India as one of our top markets in QNet. I am extremely positive and eager about our future in India.

What are your plans to tap the Internet and mobile applications platform amid the government pushing digital agenda in a big way?

QNet was a pioneer in the direct sales industry in adopting the e-commerce model way back in 1998. We married the concept of direct selling, which harnesses the power of people and relationships with the power of technology, before any other company in this industry. This has been one of the primary drivers of our growth from the heart of South East Asia to more than 100 countries in the Middle East and North Africa region, Central Asia, East and West Africa and most recently Europe and Russia.

All our transactions are 100% digital on our e-commerce platform. We provide all distributors with a virtual office on our platform to track their orders, earnings, oversee the performance of their teams, and manage their business.

We have also introduced mobile apps that allow our distributors to conduct their business on their smartphone or tablet while they are on the move. We also provide all our business and marketing material through the virtual office and through our mobile apps so that distributors have all the information and support they need without needing to carry around bulky materials.

We will launch a new free app in May this year that provides some unique features to help our distributors market their business and connect with their teams. It will include options to live broadcast social feeds and training programs, and feature exclusive content about our best selling products, which can be sent to prospective customers directly through the app.

 How do you see the Global landscape of Direct Selling Industry transform in the next 5 years? Can you share the industry’s impact on employment, growth potential and estimated revenue?

The direct selling business is today a $183.7 billion industry globally with more than 100 million people involved in it. In India, an estimated 40 lakh people are involved in this industry, and Indian companies here generated approximately $1.18 billion in revenues in 2015.

A look at past WFDSA global statistics reports shows the continued growth pattern. Global revenues increased by 7.7% since 2014, and the number of people involved is up 4.4% from the previous year.

Key reasons for growth

  • A significant factor that accounts for this growth, both in sales and people involved is the global rise of entrepreneurship. This growth shows the vibrancy of the model as an unmatched opportunity for entrepreneurship.
  • Customers gravitate towards the personal touch direct selling provides. Personal touch gives this profession an advantage over buying a product off the shelves.
  • In addition to showcasing the benefits of the products, distributors can also act as coaches, helping people stick to their resolutions and experience success in their new venture.
  • Technological advancements have also helped this channel evolve continuously.  Evolving e-commerce platforms have allowed direct selling companies to give their distributors tools to easily expand their business. Online ordering, 24/7 access to training, and no need for inventory are making it easier than ever for direct sellers to succeed.

The Asia-Pacific region is responsible for 46 percent of global direct sales, followed by the Americas (34 percent), Europe (19 percent) and Africa-Middle East (1 percent). People living in emerging markets, or developing economies as they’re often called, are increasingly looking to direct selling to provide a means of income for themselves and their families.

One of the biggest trends shaping the business landscape today is the emerging power of the millennial generation. This emerging generation seeks meaning and purpose in everything they do. This doesn’t necessarily imply that they don’t care about income and success, but they definitely buy into the idea of social entrepreneurship, which means they’re looking for a positive return to society; and this requires a different approach to rewards and metrics.

The new gig-economy or sharing economy is changing the way we work. We often hear that ride-hailing apps like Uber and Ola have revolutionalised the transport industry by being disruptive. It has sent other industries scrambling, left regulatory bodies scratching their heads, and—perhaps most importantly—has demonstrated that nine-to-five jobs aren’t the only way for individuals to earn an income.

Direct selling companies have quietly been doing that for years, only without all of the mainstream discussions and media coverage that pervades conversations about Uber, Ola and their ilk. As flexible earning becomes increasingly commonplace and the world continues to shift away from traditional work arrangements, direct selling will achieve a level of public recognition that it has never experienced—not just as an avenue for flexible earning, but as a leader in the space of independent work.

The Indian Government has initiated the process of reforms in the direct selling industry by issuing the draft guidelines. How do these guidelines compare to the ones in Singapore and Malaysia?

I would like to start by saying that we welcome these guidelines by the Ministry of Consumer Affairs. This is a step in the right direction. The biggest challenge the industry has faced in the last 10-15 years in India is a lack of regulatory framework, which has led to a lot of confusion, baseless allegations and comparisons to pyramid schemes. It’s a big step forward for the direct selling industry in India.

Considering that India is the 20th largest direct selling market in the world, and one of only 23 countries that are billion dollar markets globally*, it is about time the industry was regulated properly.

When any industry is regulated its potential for growth is immense. These guidelines will help weed out fraudulent players, allow serious companies to grow, and ensure protection of consumers. Both Singapore and Malaysia have specific and strict direct selling and MLM legislation. QNet is fully compliant in these heavily regulated countries.

The need of the hour is to formulate clear-cut laws to govern the direct selling industry in India which has been generating large scale self-employment and contributing to the exchequer. The draft guidelines are a good first step, but we have a long way to go before we can compare with these international laws.

There is still no protection for genuine direct selling companies from the application of the Prize Chits and Money Circulation (banning) Act or other investment related acts. Media reports continue to refer to direct sellers as investors, which is misleading and incorrect.

Given the huge employment proposition that direct selling companies bring about, it would be in the best interest of all the stakeholders that the States expeditiously formulate a policy framework based on these guidelines to help clear the blurred lines between ethical industry players and fraudulent companies.

*Source – http://directsellingnews.com/index.php/view/meet_direct_sellings_billion_dollar_markets#.WDOoKaIrJsM

Are there any learnings for India from other developed markets of Direct Selling Industry? 

In Singapore, the Direct Selling Association, a self-regulatory body works closely with the Consumer Association of Singapore (CASE) which provides independent accreditation for direct selling companies. QNet was one of the first companies to become accredited under this scheme. This accreditation gives prospective QNET customers and representatives a whole new level of assurance that they will receive some core protections as consumers.

In Malaysia, the Direct Selling Association works closely with the Ministry of Domestic Trade, Co-Operatives and Consumerism, Ministry of Finance, Ministry of Health and other government bodies to create and maintain an environment that is conducive to the growth and stability of the industry in Malaysia 

DSA Malaysia’s Code of Conduct is an example of self-regulation. It is a strict and effective code of conduct implemented worldwide, and endorsed by the Ministry of Domestic Trade, Co-operatives & Consumerism.

QNet is a member in both these DSAs. It would help to have an independent self-regulating trade body in India under the purview of the Ministry that is not controlled by any one company. Also, a specific regulator, like an ombudsman, for instance, would also be useful in matters of mediation or review.

How can a strong Direct Selling Industry benefit a country like India? Are there some global examples?

Every month, a million Indians become age-eligible to join the workforce, but the growth in jobs has not kept pace with the rising number of aspirants. The last quarterly survey by the Labour Bureau showed that India has never created so few jobs since the survey started in 2009, as in 2015 — Only 1.35 lakh jobs compared to more than 9 lakh jobs in 2011 and 4.19 lakh in 2013 in eight labour-intensive industries.

The result— unemployment has been on the rise, despite India  being one of the brighter spots in a slowing global economy. In light of the current situation, how can we create these many jobs? The one possible solution to this grave problem is promoting entrepreneurship.

Entrepreneurs hold the key to the growth of a nation’s economic development and growth. The direct selling industry provides a potential solution by promoting entrepreneurship and self-empowerment.  The direct selling industry is putting a dent in the unemployment cycle for numerous professionals. In fact, direct selling companies are some of the only organizations that offer significant, substantial training to the people who need it most—those who are currently unemployed—for little to no cost.

Companies in the direct selling industry provide invaluable training skills. Not only do people learn financial principles, which they can use to build their business, the training they receive helps them with their personal growth that is also transferable to other careers they may have in the future.

The World Federation of Direct Selling Association (WFDSA) completed a socio-economic study in 2014 (conducted over a 10 year period) in the world’s largest direct selling markets: Brazil, Colombia, Canada, Japan, India, Korea, Mexico, Peru, Russia, South Africia, Taiwan, Thailand and the United States.

In every single market, the industry was able to demonstrate its positive impact in areas in economic, fiscal and social contributions.

The highlights of the study are available here – http://wfdsa.org/initiatives-and-resources/publications/key-socio-economic-facts/

What can the industry players do to prevent mis-selling and misrepresentation?

All legitimate direct selling companies usually have a strong code of ethics for distributors to model their behaviour on. This should not just be a footnote in a brochure somewhere, but inculcated in distributors through continuous and on-going training and education.

Companies should also provide a proper customer grievance redressal forum and an easy process to allow reporting of any misrepresentation to the company, so that action can be taken.

Then why is it not done till now? What can be done to improve the situation on ground?

While I can’t comment on other companies, I can talk about our experience at QNet. The company has zero tolerance for any misrepresentation or unethical practices of Independent Representatives (IRs) promoting the business. Genuine complaints are dealt with firmly. In fact, over a period of around 4 years, the company has terminated over 450 IRs who have been found to be in violation of our policies and procedures.

However, we can only take action if the complaint or grievance is brought to the company’s attention. We have a well-established redressal system for addressing any IR / customer complaints including misrepresentations by the IRs. There is a dedicated network compliance department that monitors the network of Independent Representatives.

One of the challenges we have faced is that people who feel that they have been cheated by someone in the name of QNET, go to the police instead of bringing it up with the company. In such cases, if they won’t inform us of what has happened, how can we help them?

We have a very clear 30-day refund policy. If a person has been fraudulently made to purchase a product and registered as a distributor, without realizing what they were getting into, they can cancel their order and terminate their contract with us within the 30-day period, and give us the details of the person who misled them. We will refund the person and take necessary action against the person who misrepresented.

We have also set up a well-established process to address consumer grievances. We now do a thorough check on any new person signing up as an independent representative (IR) after a first time product purchase.

  • All new IRs receive a phone call from our support team and they follow a detailed checklist of questions to ensure the person is aware of the business he/she has signed up for and understands what product they have purchased.
  • This is followed by a standard KYC check.
  • Then a One Time Password (OTP) is issued to the registered mobile number of the independent representative, so as to authenticate his/her registration process.
  • Only after this, the IR’s registration is successfully completed with QNET.

After this, the new IR can login to their Virtual Office on the QNet website, and find all the relevant documents related to their business.

Can you indicate the challenges and opportunities that QNet Global is facing in India?

The challenges have always stemmed from the ack of regulatory overview for the industry, which has resulted in QNet being unfairly targeted under acts such as Prize Chits and Money Circulation Scheme (Banning) and laws relating to public deposits in India. We take this opportunity to reemphasise that we are not an investment scheme.

Since the policy guidelines are in consultation stage, it would take some time before the final law takes shape. What would be your strategy to do business in absence of a stronger regulatory framework?

For now, we are happy to work within the framework of the draft guidelines provided by the Ministry of Consumer Affairs. Since these guidelines were issued, we have made all the relevant changes as required to ensure 100% compliance. An affidavit to this effect has also been submitted to the Ministry, as per the directive.

While our lawyers deal with the legal challenges and we will follow the due process of the judiciary to clear our name, our focus and priority is our distributors. Thousands of QNet Independent representatives have been affected by the negative publicity surrounding the on-going investigations. We want to make sure they know that QNet is committed to their success and we are not going anywhere

There are reports about QNet investing 300 crs in the next few years and launching several new products. Are your plans dependent upon the faith of promoters and Shareholders of the company?

The introduction of the model direct selling guidelines is in some ways a game changer for this industry in India. Things can only get better from here on for genuine direct selling companies. Of course, we realise that a lot is dependent on how state governments adopt and implement these guidelines. We are cautiously optimistic. We do have big plans for India, but like many other companies we are waiting and watching how the implementation unfolds on the ground.

While our legal teams work on vindicating us and clearing the names of our officials, we are continuing to talk to many interesting Indian SMEs to develop unique products for us and are on track to launch between 8-10 new products over the next financial year.

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