How direct selling is regulated and managed in different markets
“THAILAND”
by
Anuwat Dharamadhaj
Secretary General to the
Consumer Protection Board
Direct selling business in Thailand
Total market value : US$ 511 million
Number of direct sellers : 3.8 million people
Source: Thai Direct Selling Association as of 2002
Why the Act ?
• Direct approach to the consumers
• Electronic purchasing and direct marketing
• Fraud to the public i.e. over claim, pyramid scheme
• Pressure/aggressive sales
Direct Selling and Direct Marketing Act
B.E. 2545
Effective on August 29, 2002
Concept of the Act
• To protect the consumers
• To protect the direct sellers
• To promote the direct selling business
To protect the consumers :
• When purchase the products
from the direct sellers
• When the products do not
perform as claimed
• When want to return the products
Significant Sections :
- Permission is required before entering to
the consumer’s home/workplace. Business
identification card must be presented.
- Sales documents must be provided to the
consumer.
- Consumer has the rights to refuse the goods
or services after purchasing.
To protect the direct sellers :
• When recruited to be the direct sellers
• When pay the unreasonable application fee
• When forced to purchase the business support materials
• When want to return the products or quit from the
business
Significant Sections :
- Fees for membership, training and
promotional materials should not be
overrated.
- Business contract must be notified in the
written form.
- Independent distributor has the rights to
return the goods and promotional materials
to the direct selling operator.
To promote the direct selling business : • To regulate the direct selling business as a whole
• To establish the good image of direct selling business
• To create trust among the consumers -- quality of the
products
• To promote the business opportunity for extra income
and economic situation
• To ban the pyramid scheme
Significant Sections :
- Registration must be done before
operating the direct selling business.
- The operation of the business must
be complied with the payment plan.
- Direct selling operator should not seduce
new members by offering commission.
Direct selling company registration update
August 29, 2002 - August 28, 2003
Submitted : 335 companies
Registered : 234 companies
Good points of registration :
• To have the data base of all direct selling
companies in Thailand
• To simply regulate and easily protect the
consumers and direct sellers when get the
complaints
Next step :
• Ministerial regulations
• Review of the registered compensation plans
• Ban the bad, Promote the good !
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