Why Direct Selling Companies Need Regulatory Bodies- QNET Official

 

Mr Biram Fall, Regional General Manager, QNET Sub-Saharan Africa said direct selling companies needed a regulatory body to monitor its activities and curb the  misconception of using unethical strategies.

The News Agency of Nigeria (NAN) reports that QNET is an E-commerce direct selling company.

Fall made this known in a statement on Thursday in Lagos.

He said that while the industry had improved the lives of many, it also faced legitimate criticisms, especially in emerging markets that had little or no exposure to sales model. 

Fall said that Africa had often been called the new frontier of growth for the direct selling industry with the region experiencing one of the highest three-year CAGR at six per cent.

He noted that yet many African nations, legitimate direct selling businesses were often misunderstood as illegitimate schemes due to lack of awareness and relevant legislation.

Fall said that  lack of industry regulatory bodies, such as a direct selling association whose mission was to provide education about the business model, had resulted in an insufficient legal definition of the industry.

"One common misconception is that it is a pyramid scheme or get-rich-quick fraud.

"Some critics point out that certain dishonest entities, many of whom masquerade as direct selling companies, have violated the laws,  by making exaggerated revenue promises and using unethical marketing strategies, "he said. 

According to Fall, these issues affect the direct selling industry worldwide and Sub-Saharan Africa is no exception, making it harder for legitimate organisations to attract and retain distributors and customers. 

The regional manager said that in spite of  the challenges, many direct selling companies were determined to change the industry's image in Sub-Saharan Africa. 

He said that the World Federation of Direct Selling Associations (WFDSA) had published an official Code of Ethics governing the actions of direct selling companies and their responsibilities towards ensuring fair competition.

Fall added that this was a toolkit that direct selling companies worldwide must adhere to. 

According to him, for businesses such as QNET, a lifestyle and wellness-focused direct selling company, implementing more robust procedures, such as regular training and monitoring of distributors' activities to ensure adherence to sales practices was important.

He added that trainings should also be done on product sales,compensation claims, and product safety regulations, noting that this was a crucial component to addressing the misconceptions about direct selling.

Fall urged direct selling companies to improve transparency by providing clear and accurate compensation plans, product pricing information to governments, legislative bodies, distributors and customers to combat misinformation regarding the industry.

"Creating and maintaining freely accessible resources, such as the WFDSA website and the direct selling disinformation centre, are positive steps towards shifting the public's perspective on direct selling and help local communities benefit from this industry.

"Direct selling in Sub-Saharan Africa has emerged as a significant driver of alternative employment opportunities and economic empowerment, while also providing customers with unique and diverse products. 

"The industry has successfully enabled individuals, including those with limited resources, to start their own businesses and generate income, fostering entrepreneurship and skill development, "he noted.

The regional manager however, said direct selling faces challenges in the region, including misconceptions, regulatory gaps, and fraudulent entities. 

He explained that to overcome these obstacles, direct selling companies were taking proactive measures, such as adhering to codes of ethics, implementing training programmes and enhancing transparency. 

Fall said that by educating the public, engaging with regulatory bodies and providing accessible resources, the industry aimed  to transform the narrative and highlight the positive impact of direct selling in Sub-Saharan Africa.

Source: NAN