Network Marketing in Nepal

Network Marketing in Nepal         

            Network Marketing, a thriving business model around the globe with one trillion yearly revenue generation and more that 118 million people associated with it. Network Marketing industry has been  covered by Forbes and other reputed business magazines as the industry which has produced largest number of millionaires around the globe regardless of the geographical locations, caste, color, academic qualification, family background and hence provides equal opportunity to thrive financially.

• Also read: Network Marketing, a next Boom Industry

         If Network Marketing is such a wonderful profession, than why it has always been controversial issue in Nepal? Why Government of Nepal has banned this profession for more than a decade? Why is Nepali press continuously announce it as a fraud and scams? Popularly dubbed as “One World One Business” in the global market, Why this business has attracted a significant number of people? And despite being banned by the government and declared illegal, Why this business is flourishing unabated throughout the country?
         These are the major questions every economically conscious citizen is seeking an answer. So, in this article we will discuss every aspect of this business model, its past, present and future and seek to find the answers.

History of Network Marketing in Nepal

History of Network Marketing in Nepal is more than two decades long, as the inception of Network Marketing companies in late 90's. However, the history is more conflicting, controversial than a progressive one. Almost all of the company failed in Nepali market, many of them cheated more that 10 billion rupees. Genuine multinational companies like Amway, DXN are other left the market. We will later analyze what went wrong about Network Marketing in Nepal but first lets go through the major events during last two decades. 

  Timeline of History of Network Marketing in Nepal 

Late 1990's :

• Network Marketing business initiated in Nepal. Several international companies like Gold Quest Int, Robins International, and other started their operation in Nepal. 

2003 :

• Government of Nepal put a ban in operation of Gold Quest Int after the fraud case of NPR 2 billion filed against it.  

2006 :

• Nepal based Network Marketing company Unity Life International established later known as Unity scam.

2007 :

• Nepal based Herbo International company established. 
• Direct Selling Association of Nepal was established.  

2010 :

• Government of Nepal directed Network Marketing companies to deposit 2.5 million deposit as per Network Marketing Directives 2010 in January 31, 2010.
• Government of Nepal Banned Network Marketing companies after multi billion Unity scam exposed in May 2010.

Unity Scam : Unity Life International, a Nepal based money circulation company sold social security schemes following Network Marketing model commonly known as Unity Scam. Unity cheated NPR 3.79 billion form its 366,342 members.

• Network Marketing companies excluding Unity Life International filed a wit petition in the Supreme Court, against the government banned.  

2012 :

• Supreme Court of Nepal upheld the government decision declaring Network Marketing illegal. However, Supreme Court Division Bench of Justice Sushila Karki and Justice Bharat Raj Uprety directed government to regulate the business by formulating proper laws and government after the court's decision initiated the formulation of Direct Selling Act.  

2017 :

• Parliament of Nepal approved Direct Selling Act 2017 with full majority on October 10, 2017 and approved by the Honorable President of Nepal on October 18, 2017.

2020 :

• Government of Nepal approved Direct Selling Guidelines 2020 through Cabinet Meeting on January 23, 2020 and declared Network Marketing Legal after imposing a decade long ban.

What went with Network Marketing in Nepal ? 

         What went wrong or you can say every thing went wrong with Network Marketing in Nepal. As we can assume from the above mention events, the history might be disastrous, with several companies banned, fraud allegations of several billions rupees, hundreds of arrest and imprisonment and ultimately the profession banned for more than a decade.

       Network Marketing is not a scam, it is a genuine and proven business model. But the most unfortunate happen to this business model is that every scam adopts network marketing model for its operation. This is not only an issue in Nepal, it happens worldwide. So, now and then questions arise to this business model around the globe. But today we will discuss what went wrong with Network Marketing in Nepal. I have listed some of the key factors that made the business controversial for more than two decades.

Lack of Law : 

             Network Marketing business operated for more that a decade without any law. Government of Nepal formulated the first Network Marketing Directives in 2010 under consumer protection act of Nepal. Before then network marketing companies were treated as other traditional companies and registered in Office of Company Registrar. Due to lack of proper guidelines government of Nepal failed to monitor Network Marketing companies and its operation. 

            Similarly, Government of Nepal also failed to differentiate between the ponzi scheme (money circulation companies, like Unity Life International) and genuine network marketing companies, which turned out to be a catalyst for such ponzi scheme companies to cheat the public.

Company's Intention: 

          Network Marketing evolved as a model of distribution of goods and services to larger customer base without huge investment through its own network of customers. So this model is highly popular among small and medium enterprises and proven as highly successful model for such enterprises, who have quality product and less capital to invest in distribution channel and advertisement.

         What went wrong with the companies in Nepal is that they have done reverse engineering of the concept of Network Marketing. The concept is all about distribution of high quality product, but these companies only adopted the power of network marketing model without any product or with low quality products. They were only focused in the circulation of money, which is also known as Pyramid Scheme and it is banned worldwide.  

Lack of Knowledge : 

            Network Marketing companies and government both failed to transfer the knowledge about network marketing to general public. So the public failed to differentiate between ponzi scheme and genuine network marketing companies and ultimately loose huge amount of money.

              Network Marketing has been presented as easy and fastest money making scheme rather that it as genuine business model which needs effort and time for its establishment. Most of the people invested in the companies and did nothing, just waited for the benefit. Its not their fault, they were taught so, just invest and after some months you will get this much amount profit by so called fellow network marketers.

              My friends, nothing comes for free in the world, so in Network Marketing. If you were told so, either its a fraud ponzi scheme company or a victim, who knows nothing about Network Marketing.

             I think you have found your answer, what went wrong with Network Marketing in Nepal?  I again say everything went wrong with Network Marketing. Agreed with me! Yes.

            It is now clear that all the three key actors (Government, Company and Public) were some how responsible for the failure of this business in the past. You might be thinking who is more responsible among three? I say its the Network Marketing Companies.

            Network Marketing was new to the government and the public, but the companies were well known about it. It was their duty to guide other two in the right path. But, took advantage of the situation being without any law to monitor and cheated millions of people.

Present Scenario : 

          Now and then we read several news on Network Marketing. We can say that the current situation is frightening. But despite of being in frightening situation, being banned by the government and declared illegal this business is flourishing unabated throughout the country. It is assumed that more than 300 thousand Nepali citizen are currently involved in Network Marketing business mainly in India based companies. 

           Government of Nepal has now legalized Network Marketing business model on January 20, 2020 issuing Direct Selling Guidelines and now open to any network marketing companies to register in Nepal.
 

Future of Network Marketing in Nepal :

             Now, questions arises, Can we actually earn from Network Marketing?, Can we achieve our dream from Network Marketing? Can I choose Network Marketing as a profession in Nepal? What will be the future of Network Marketing in Nepal?

            Before moving to forward with the above mentions question. Please go through the article below which discuss on the possibilities of Network Marketing business and why Network Marketing can be the greatest business module of 21^st century.

• Also read: नेटवर्क माकेटिङ्गः २१ औं शताब्दीको उत्कृष्ठ व्यवसाय

            The human civilization is facing one of the greatest challenge as Covid-19 pandemic. It has a greater impact of people's health and economy. The world has faced more than two months of lockdown and Nepal is also in the state of lockdown since 72 days and many more to continue. Apart from millions of infection of thousand of deaths around the world and world is in the verge of major economic crisis has taught several lessons for the betterment of human civilization.

          This two months long lockdown has created boundary for some people and, for some it has lifted all the boundaries. However, it has made following common realization to humankind.

Need of a Secondary source of Income :

           A secondary source of income it today's major global need and especially in the country like Nepal. Except for the corporate giants who are hardly 2-3%, people realized they are not prepared enough for an unexpected crisis.

           This Covid-19 pandemic and 73 days long lockdown will definitely lead to a financial crisis which means jobs of majority of people are endangered. Those who will loose their jobs have little savings than expected and majority has already emptied their pocket during the lockdown period.

            The situation is similar with small business. Most of the small business are either started with low investment or on loan. The situation of majority of small business has become very restricted and miserable due to lockdown, which will ultimately lead their life form one loan cycle to another. 

            The peoples priority after lockdown should be on two things, first saving what you are doing and second starting a new secondary income stream. And what can be better option than Network Marketing ? Proven and reliable business model which can be started with very minimum investment or say zero investment and can be done part-time.

Health always comes first.

             Economist Paul Zean Pilzer in his one of the best selling book The Wellness Revolution has said that 2020's will be the decade of Wellness Revolution and the revolution reach its peak by 2025. We can see the revolution coming with the inception of 2020's, Isn't it?

             Due to COVID-19 pandemic people have realized the importance of immunity and preventive healthcare. They have realized the importance of health supplements. Or we can say that we have now realized we have learnt in early school days, “Prevention is better then Cure”, Haven't you realized? Yes everyone did !

             This is what majority of Network Marketers were trying to teach you for more than a decade and majority of Network Marketing Companies deals of natural health supplements. So, its the time of wellness revolution, You want to just watch it grow or want to grow yourself with it, Its your decision !

Network is the key to success

           Everyone wants to be successful, everyone is working hard for the success. But everyone cannot be successful, interesting thing is someone is successful working 8 hours a day and someone is struggling although working 18 hours a day. Ask yourself why I am successful or struggling? Have you found the answer?

           Successful people are working harder to create and maintain a strong network which eventually will be their greatest asset or generate huge assets for them. What average people or we do is we work harder to earn more and more. Think yourself which category you belong or work are you doing?

            If you talk about highly successful companies of this time like Facebook, Instagram, Amazon, Alibaba, Zoom or YouTube, they are highly successful because they were able to build gigantic network of people or their customers.

           Patanjali, India based FMCG brand, is one of the best example of success. Patanjali first built a strong network of customers through yoga and Ayurveda. After that they created the strong distribution network giving competitions to other established FMCG products giants and will certainly out through them in coming years. The power of network is better illustrated by the picture I found in social media @successpictures.

 

          These are only the key points there are many more to justify the relavence of Network Marekting model in the present situation, when thousand of jobs are indangared and thousand of youths working abroad are returning to Nepal.

          It is sure that the unemployement rate of Nepal will significantly increase in coming few months and network marketing is only the industry having the capacity to make them self-employed within no time with zero or minimal investment.

         I believe Network Marketing in Nepal has now entered in golden phase, strong law being imposed, majority of people seeking for new sustaible financial opportunity and the world being more connected than before. Network Marketing if practiced ethically in Nepal it will create more success stories in coming days. To start with just choose the right company (avoid Ponzi schemes companies), right team and leadership and invest your time to build your network as a genuene business.

           And see the wonders of the power of networking and compounding, as Albert Einstein has said that Compounding is the eight wonders of the world.

 

Conclusion :

            Despite of having disastrous past Network Marketing has a strong future in Nepal and should be considered as a serious career and earing opportunity. The government should be focused on imposing Direct Selling Act and guidelines, effective monitoring of the company and distributors and equally focus on educating general public about the network marketing business modality and promote it as a one of the income generation opportunity.

             If you still say, Is network marketing is a next promising career option in Nepal ? I say Yes, it is but Network Marketing business should not be taken as granted, you can see wonders in this business if it is taken as genuine business and regularly learn, grow and work in a team.

 

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