In the Rough-and-Tumble Business of Direct Sales, Malaysia’s
Vijay Eswaran Learns from Mistakes and Builds a Movement.
Thousands have come to Jakarta from all over Asia, waiting with patience and anxiety for this moment. At last the music swells. An excited murmur arises; he enters behind a phalanx of bodyguards, and the crowd parts. People strain to touch him or at least his high-collared tunic. Spotlights cast him in a golden glow. He raises a hand in benediction, utters a few unheard words and lets the rush carry him on.
Vijay Eswaran has arrived.
It’s a triumphant return to Indonesia for the Malaysian founder and chairman of the
Qi Group, a young giant of
multilevel marketing with sales that could approach $1 billion in the next couple of years. His annual three-day convention, training session, pep rally and lovefest, the VCon, has attracted more than 8,000 of his company’s so-called IRs. These are some of the 4.5 million independent representatives who buy and sell his products, creating networks that they call a chain of prosperity, giving them a business of their own and a vision of a better life.
Wrapped up in the adulation, it’s tempting for
Eswaran to forget the last time his event was held here, in 2007. An obscure lawsuit in the Philippines had mutated into an Interpol arrest warrant, clapping him and three senior executives in jail for three weeks. Indonesian courts scoffed and set him free; a Manila court dismissed the charge soon afterward. But
Eswaran remembers it as one of the consequences of building a business in which some people expect a get-rich-quick scheme and feel cheated when they don’t get one.
Or as one reveler put it, “Just because there’s no limit on what you can make doesn’t mean you don’t have to work. Some people don’t, some do.” A young man from Malaysia, Omar, was without prospects in 2009 when he joined Qnet, the company’s keystone division, to sell personal-care products to a few friends, who told other friends. It was tough going at first, but now he can afford to move out on his own and wants to get married next year. “It has changed my life, and it has changed me,” he says. “For all of this I thank Vijay Eswaran.”People such as Omar have helped
Eswaran emerge as one of the most charismatic of Asia’s self-made businesspeople over the past 20 years. Selling the simple things of day-to-day life such as cosmetics and discount phone cards, while also building a thriving gold coin business, has made the 52-year-old one of the richest people in Malaysia.
Forbes Asia estimates his net worth at $500 million, based on his stake in the unlisted company as well as holdings in real estate and fine art on display in his lavish homes in Kuala Lumpur, Bangkok, Sydney, Hong Kong–where the
Qi Group has been headquartered since 1998–and London. (The company won’t divulge his stake, saying only that it’s a majority share, but insiders there indicate that it’s between 70% and 90%. Qi also won’t disclose its annual profits.)
At the same time he has been the target of dozens of accusations of everything from sketchy dealings to outright fraud. There have been outraged postings on the Internet and short-lived government crackdowns. Rumors of shoddy dealings can be the kiss of death in a business where word of mouth is all-important. So
Eswaran decided to defeat them openly, with an aggressive campaign of newspaper ads, a
website devoted to debunking the claims, and lawsuits. Now many of the claims have been retracted, and the online slurs have faded.
Feeling vindicated,
Eswaran is remaking the much maligned multilevel marketing industry, bringing in corporate-style management, information technology and new product development. He’s diversified into areas such as telecoms, travel and meeting management. He’s brought business skills, energy and jobs to developing parts of Asia where they can be scarce. And he’s done this with a company culture that stresses spiritual growth, positive intentions and service to others (see
sidebar) . “This is a very difficult part of the world to operate in,” says Charles King, an academic at the University of Illinois who has studied direct sales for 25 years. “I don’t know of any other company in Asia that has been able to master the subtleties of the multilevel marketing structure so well, continually adapting it to produce sustained growth.”
Readmore:
http://www.forbes.com/sites/donaldfrazier/2012/10/24/selling-a-better-life/
