India’s top network marketing companies are making huge profits from their lucrative deals with celebrities, politicians and corporate clients, according to a new report.
The report, published by the National Council of Direct Marketing and the National Retail Consortium, found that Indian companies are profiting from the popularity of MLM and online marketing, despite the fact that many people in India are suffering from the disease of narcissist-addicted personality disorder.
“The majority of the MLM companies have been around for a long time and have been involved in various marketing schemes, which are not necessarily ethical.
Some of these companies have also been accused of taking advantage of vulnerable people for profit,” said Ajay Chavan, CEO of the National Marketing Consortium.
The NCDM has compiled data from the NCDMS, the National Centre for the Study of Living Standards (NCSLS) and the Indian Institute of Management-Sangrur, which found that in India’s largest state of Uttar Pradesh, there are more than 2,500 MLM firms.
This is despite there being almost 8 million people in the country, according the report.
“We believe that many of these MLM enterprises have not been subjected to the scrutiny that other industries would have undergone and that many are not even registered,” said Chavan.
According to the NCDM, over 60 per cent of the companies surveyed had a market value over Rs 10 lakh, with the top 10 being the top five earning the most.
They were listed on the NASDAQ stock exchange, with each of them being valued at Rs 40 crore.
While many of the top players in the industry are based in the US, the NCDSL said the US-based companies also have some Indian customers.
It added that the NCDs were not able to determine the exact revenue that these companies were earning, but it was estimated that the companies made in India were in the range of $200-300 million.
The companies were listed in several Indian media outlets such as the Hindustan Times, NDTV, Business Standard and The Indian Express.
While there are no exact figures available, the report said they were making in excess of $1 billion annually in India.
The authors said the MLMs in India may have a market share of just 0.2 per cent, but they have a lot of potential.
“They offer a high level of engagement, they are easy to manage and they are not based on a company’s reputation,” said Rahul Prasad, CEO and co-founder of the NCDC.
“So we believe that they are a huge opportunity for the country.
There is no need for the government to intervene in the business of these firms,” he said.
The survey of MLMs conducted by the NCDL found that more than 60 per one per cent were active and operating in India for less than three years.
This included almost 20 per cent that were active for less 10 years.
In addition, the study found that the number of MLIs that were being run by “small companies” and those based in China or South Korea had doubled from 2015 to 2020.
The researchers said they would be exploring how MLMs are structured to ensure that they do not create a culture of “poverty, self-centredness, selfishness, narcissism and entitlement”.
“We will also explore how these MLIs manage their clients’ and their employees’ well-being.
This will help them develop an ethical business model and avoid potential pitfalls,” said Prasan.