Lack of legislation hurting direct selling in India: QNet

Amid furore over ponzi schemes in India, Hong Kong-based QNet today said organised players in the direct selling sector are suffering due to lack of proper legislation in the country.
The company, which is present in India through a master franchise Transview Enterprise India Pvt Ltd, also said India is losing out on contribution to the country's GDP from the direct selling sector.
"By not having a proper structure, India is losing a major contribution to the country's GDP. Direct selling model will be the next industry addition to India's GDP... Surprisingly, we do not have a legislation in a big country like India," QNet Ltd Chief Executive Officer Dave Osh told PTI in an interview here.

The direct selling industry is already a big contributor to the economies of many countries such as Japan, Malaysia and Taiwan, he added.
Giving example of Vietnam, Osh said the country has a proper act on direct selling model that takes into account various aspects like compensations, plant standard, product quality and marketing.
"We are launching our brand and products in Vietnam next month. It is a very strict and a communist country. There is no FDI and they are very poor. Still, Vietnam has a very well-regulated structure for our kind of business model," he added. QNet has an annual revenue of around USD 500 million.

Commenting on the current scenario, Transview Enterprise India Pvt Ltd Chief Executive Officer Suresh Thimiri said there are possibly about 4,000-5,000 direct selling companies in India and "more than half of them are fly-by-night operators".

"Without any law, it is leaving a negative impact on genuine small and mid-sized companies. The government should realise that many small scams are already happening in the direct selling model," he added.
Thimiri further said the Indian government is at present only "reacting, but not acting", like it has done in the scam involving Kolkata-based Saradha group.
Established in 1998, the Bangalore-based Transview Enterprise India at present sells a range of products under various brands of QNet. While a few products are manufactured in India by different producers under licence agreements, most of the goods are imported from different parts of the world.

The company is looking to increase localisation of different products and is exploring possibilities with various producers to roll out these locally.
"We have moved to food supplement category and India has one of the best manufacturing bases for this category in the world," Thimiri said.
The company is also looking to locally assemble its air and water purifiers in the near future and shift production of these goods to India from China, he added.