Direct selling laws and regulations will be promulgated soon, and direct selling will finally be opened in China. What kind of scene will China direct selling be after legislation? Will this opening be the same as that of 1996? This is a problem that many people care about. So, what will China's direct selling be like after legislation? Mr. Kuang Qiang, who has a lot of experience in direct selling, once said: "In the next few years, the direct selling market in China will form a competitive pattern in which domestic and foreign investment will be simultaneously developed, multi-oligopolies will exist, and small and medium-sized quasi-direct selling enterprises will blossom everywhere. After the convergence of forces formed by the government, direct selling enterprises, distributors and consumers, great energy will be generated. This kind of power will guide the direct selling market to develop in a more rational and healthy direction. "
Mr. Kuang Qiang's analysis is correct, but that is from the general development trend. At present, because the direct selling laws and regulations have just been promulgated and the direct selling licenses are strictly issued, only a few enterprises can get direct selling licenses. I think, as far as the current situation is concerned, the direct selling market in China will have the following situations:
Normative adjustment period
In order to meet the requirements of "Regulations on Direct Selling Management" and "Regulations on Banning Illegal MLM", enterprises must make some adjustments to the previous bonus system and some internal management systems to standardize their operations and obtain direct selling licenses.
It is not difficult for enterprises to adjust their internal systems or disclose information, and some enterprises have even begun to do so. But the crux of the problem is that in the upcoming Regulations on Direct Selling Management, the state has set an upper limit on the remuneration paid by direct selling enterprises to each salesman, which is what we often say. This upper limit is much less than the proportion of bonuses distributed by enterprises in the past. We know that the sales model of direct selling is so attractive not because it can change you from a consumer to an operator with little or no investment, nor because it can give you the freedom of time, although it is strongly advocated by direct selling enterprises. The key to the attraction of direct selling is that the high bonus system can make people realize wealth freedom. However, because enterprises must abide by the provisions of the Regulations on Direct Selling Management, every direct selling enterprise must adjust the bonus system, which will directly affect the interests of direct sellers, so every enterprise must act cautiously. In the adjustment of bonus system, enterprises should not only abide by the national Regulations on Direct Selling Management, but also ensure the interests of direct sellers to the maximum extent, otherwise a large number of direct sellers will be lost. In that case, the loss to the enterprise will be irreparable. Because the products of enterprises are sold by thousands of direct sellers in Qian Qian, and the interests of enterprises also come from the profits of thousands of direct sellers selling products in Qian Qian.
Recently, the reporter learned that Ruxin (China) Daily necessities and health products Co., Ltd. took the lead in adjusting the system in order to adapt to the relevant provisions of the Regulations on Direct Selling Management. However, due to the failure of explanation, it is difficult for dealers to accept this system. Some high-level dealers even went to the Shanghai headquarters of Ruxin China to start a dialogue with Qiu Jinyun, president of Ruxin China.
After legislation, problems like Ruxin may appear in every direct selling company, but this cycle will not be too long. This depends on the specific situation of each direct selling company. For enterprises that are one step ahead like Ruxin, the adjustment period will soon end.
Period of fierce competition
In fact, this kind of competition is now like an undercurrent, even more intense. After legislation, the competition in the direct selling market will be manifested in talents, distributors, product quality, price and service, and this competition will exist for a long time.
First of all, it reflects the competition of talents. In the article "What is Lack of Direct Selling in China" in the fifth issue of this magazine this year, the author also explained the current shortage of direct selling talents in China. The shortage of talents is a big problem that restricts the healthy development of China's direct selling industry. Recently, we have received calls from some direct selling enterprises and enterprises preparing to enter the direct selling industry, asking us to help them find some direct selling enterprise management talents. As far as we know, among the management talents of direct selling enterprises in Chinese mainland, a large part of the management personnel of direct selling enterprises come from abroad, Taiwan Province Province and Hongkong. After legislation, some of the first batch of licensed enterprises will expand their scale, and some new direct selling enterprises and enterprises preparing to enter direct selling need a large number of talents who know both management and direct selling. Therefore, the competition for talents will intensify.
The second is the competition of direct sellers. The competition of direct sellers is mainly the competition among direct selling enterprises. In order to continuously expand their market share, some enterprises have taken various measures to rob dealers, especially for dealers who have a large number of teams under their command, and even there has been bad competition in buying teams with heavy money. Of course, after legislation, the flow of direct sellers is normal, and even there will be a phenomenon of gathering with the first batch of licensed enterprises. Direct selling companies with standardized products, good quality, promising development prospects, strong price competitiveness and good service will be favored by direct sellers.
There is also competition among distributors within an enterprise. The competition between the internal team and the subordinate dealers will have a bad influence on the corporate image, which is a problem that enterprises should pay attention to. Similarly, the competition between enterprises should also prevent vicious competition, otherwise there will be chaos like 1998. This is not only unfavorable to the development of an industry, but also unfavorable to the development of enterprises.
The competition between product quality and price is also a key point of direct selling market competition after legislation. With the opening of direct selling, consumers have more space to choose direct selling products, and more comparison means more recognition. Because China has limited the scope of direct selling products, the key is whether the quality and price of products are competitive in the market. In order to expand market share, direct selling enterprises must make great efforts to improve product quality and reduce product prices. This is undoubtedly a good thing for consumers.
Service competition will be reflected in two aspects: the service of direct selling enterprises to dealers and the service of direct selling enterprises to consumers, because only enterprises can attract more direct selling enterprises to join, and similarly, direct selling enterprises can expand the market by serving consumers well.
Market integration period
Although there are still many direct selling enterprises opening, although there is no limit to the number of the first batch of enterprises issuing direct selling business licenses, many enterprises cannot get direct selling business licenses because of the threshold of registered capital of 80 million and deposit of 20 million.
At present, the Ministry of Commerce has not accepted the relevant information about the registration of direct selling enterprises, and there are many speculations about the first batch of enterprises that can get direct selling licenses, and different versions have appeared. Every enterprise that wants to get the license in the first batch is doing its best. Wang Shuxin, a lifelong TEDA in Tianjin, even shouted such a slogan: "Be sure to get the license in the first batch". One argument is that there are 30 domestic companies and 30 foreign companies; Another way of saying it is that the total is 30, with foreign investment accounting for 2/3 and domestic investment accounting for1/3; Others say there will be some new faces. However, in any case, one thing is certain, that is, the first batch of enterprises that can get direct sales licenses must be a minority. So, what about the enterprises that didn't get the first batch of direct selling licenses? Mu Bai, deputy editor-in-chief of this magazine, once made an analysis and forecast in the article "China Direct Selling Begins with Mergers and Acquisitions". A new round of integration will be a trend of China's direct selling industry after legislation.
There are four ways for the first batch of enterprises that failed to get the license: one is to integrate with the enterprises that got the license and develop together; Second, continue to make preparations and wait for the second batch of cards. This will take a long time, and the pressure on enterprises will be greater; The third is to go abroad to expand the market, just like Tiens. However, it is also difficult for enterprises that have not obtained a license; Fourth, operating in underground or gray areas has no intention to declare and obtain a license at all, but it is risky. Therefore, taking the road of integration is a shortcut and will become the first choice for small and medium-sized direct selling enterprises and quasi-direct selling enterprises.
Integration is not only the integration of enterprises, but also the integration of teams, systems and products. Through integration, there will be a number of excellent teams, systems and brand products.
Strike hard in the normative period
In a period of time after legislation, due to the intensification of industry competition and the arrival of market integration, there will be some problems in market competition. The first batch of enterprises that can't get a license, especially those that don't want to stay in this industry for a long time, will ignore the existence of national laws and regulations and conduct some illegal operations, and some will even disrupt the whole market. Then, after legislation, will China's direct selling market be completely banned again because of market chaos, like 1998? The answer is yes-no!
Whether to comply with the promise of WTO or to meet the needs of the development of market economy, direct selling, as a marketing method, will surely develop in China for a long time and will gradually mature. The regulatory authorities will investigate and deal with irregular operations and illegal pyramid schemes in accordance with the Anti-MLM Regulations, and the crackdown will be intensified.
In the past, there was no legal basis for the administrative department for industry and commerce to deal with illegal pyramid sellers. After the legislation, for the healthy development of China's direct selling industry, regulatory authorities at all levels will crack down on illegal pyramid schemes in accordance with the Anti-MLM Regulations and related laws. Recently, Inner Mongolia, Liaoning, Sichuan, Guizhou, Chongqing, Henan, Guangxi and other provinces, municipalities, autonomous regions, industry and commerce, public security and other departments have stepped up efforts to crack down on illegal pyramid schemes. It can be seen that after legislation, there will be a period of severe punishment of norms. Because only by cracking down on illegal pyramid selling can the direct selling industry develop healthily in China.
Stable development period
The development of China's direct selling industry, like other countries in the world, will enter a stable development period after the above period. This period may come a few years later.
Through several periods of normative adjustment, fierce competition, market integration and strict standardization, those enterprises that have no competitive strength, bad boss mentality, short-term profit and standardized operation in this industry have been eliminated. Consumers can also recognize and accept the sales model of direct selling and direct selling products, and enterprises that have obtained licenses have also embarked on the road of long-term development. Since then, direct selling in China has entered a period of steady development.
The biggest feature of the stable development period is rationality. Rationality of relevant national authorities, enterprise rationality and dealer rationality. Consumers are also rational. Relevant national authorities have accumulated management experience in this industry and can clearly distinguish between direct selling and illegal pyramid selling; Enterprises don't think they can make a lot of money as soon as they enter this industry. Those enterprises that want to enter this industry will be more cautious and standardize their operations in order to get greater development; Dealers will also be more rational and will not engage in illegal business; As consumers, direct selling, a more convenient and quick way of consumption, will no longer be disgusted, but can be selectively accepted.
For the development of direct selling industry in China, we look forward to the stable development period of direct selling in China. At the same time, we also hope that our direct selling enterprises and enterprises preparing to enter this industry can work together for the arrival of this development period!