Introduction
At times, media houses have alleged that QNET’s business model is a scam or a pyramid scheme, but the facts narrate a different story – a business model that is built solely on high-quality products, sold by motivated distributors. By providing a balanced perspective, we aim to equip our readers with the necessary information to bust the myths surrounding QNET. In this article, we will shed light on what is direct selling and information about QNET’s legacy and products. We will also tackle myths around QNET, and interpret the legal aspects of the Honourable Supreme Court’s verdict.
Let’s begin!
What is direct selling?
Direct selling is a network marketing business model. Here, products and services with unique features are exclusively marketed through the direct selling company and sold directly to customers. These products are primarily sold by registered distributors – who are many times also loyal customers that believe in the products – and promoted through word-of-mouth marketing. Relationship-based marketing is at the core of a direct selling business model. It has existed for more than 150 years and is growing in popularity. In direct selling, the distributor’s income directly depends on the volume of product sales they are able to make, using the network marketing model.
Direct selling has proven to be successful for QNET as well as many brands world-over, such as Tupperware, Amway, Oriflame, etc. and continues to be an effective go-to-market approach that offers micro-entrepreneurial opportunities to aspiring entrepreneurs. The global revenue of the direct selling industry was around $192.2 billion in 2018, as reported by the World Federation of Direct Selling Associations. FICCI-KPMG predicts that India’s direct selling industry will grow and reach INR 645 billion by 2025. The report also states that by then, the direct selling industry in India will create entrepreneurial opportunities for more than 18 million individuals.
What is QNET?
QNET is one of Asia’s leading direct selling companies. It integrates business and technology to empower millions of entrepreneurs through direct selling.
A global direct selling company that started in 1998, QNET was one of the first companies in the world to incorporate e-commerce into traditional face-to-face direct selling. It is headquartered in Hong Kong, with over 25 offices in Asia, the Middle East, Europe, Sub-Saharan Africa, Russia, and the CIS region. QNET is a member of direct selling associations of Malaysia, Singapore, Philippines, UAE, and Indonesia.
QNET offers innovative products and services to customers around the world, with the aim of improving people’s lives. These products are exclusive and of high quality, relating to lifestyle, health and wellness, personal care, and home care.
In India, QNET operates through a local sub-franchisee called Vihaan Direct Selling (India) Pvt Ltd, registered in Bengaluru.QNET offers home care and personal care products, nutritional supplements, and luxury watches through Vihaan Direct Selling. The products are sold by a network of over 600,000 registered QNET distributors in India. While individuals can buy directly from QNET as retail customers as well, many loyal customers who have experienced the quality and integrity of the products and the back-end processes that go into making them, have subsequently become distributors of QNET’s products themselves.
All QNET products meet the highest quality standards and are backed by certifications, guarantees and warranties. QNET also ensures adequate quality testing of all partner companies’ and suppliers’ products. In addition, third-party quality tests are performed, and FSSAI and Ayush certifications are sought for consumable products.
6 myths around QNET and direct selling
Due to various misconceptions around direct selling, QNET India has been under the spotlight because of baseless rumours. Here are some of these common misunderstandings and false allegations that cause people to sometimes question the legitimacy of QNET’s business model.
Six most popular myths regarding QNET are busted below!
1.“QNET India runs a pyramid scheme.”
QNET’s sales are run via a network marketing model that engages distributors – people who are self-employed and earn commissions only on the basis of sale of products. If the distributor sells a larger number of products, their commissions are obviously higher. In contrast, a pyramid scheme makes a profit by recruiting new sellers rather than selling the product and usually involves a large upfront fee that is not returnable. QNET complies with all domestic consumer protection laws and has a sustainable sales model of commissions through product sales. Legitimate direct selling companies such as QNET pay commissions only based on the sale of products. If there is no sale of products by the seller, then there is no commission.
Read: Why is direct selling not a pyramid scheme?
2.”Only those on the top get rich.”
When a person is registered as a direct seller or an independent distributor, their position in the team is irrelevant to the amount of income they can earn. Selling products and earning your own commission is the only way to make money. Commissions are not earned based on member recruitment. The truth is that the distributors who generate the most product sales make the most commissions. Interestingly, at times, some distributors earn more than the seller who introduced them to the business. Here, individ