Disappearance of direct sales firm leaves Hanoi distributors in the lurch

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A multi-level marketing firm in Vietnam has reappeared in Ho Chi Minh City under a different name, recruiting a large number of people, a short while after it disappeared from Hanoi and  left many distributors empty-handed.


However, most of the workers abandoned by Agel Vietnam, a foreign-invested company selling functional food with a pyramid-scheme selling scheme in Hanoi, have switched to Qivana Vietnam in Ho Chi Minh City.


The leader of Qivana is Hoang Hai Yen, who was director of Agel Vietnam, according to an investigative report by Tuoi Tre.


Agel first appeared in Vietnam in the middle of 2008 and quickly became known as one of the most successful direct sales firms, if not the number one of its kind in the country.


Agel products were sold to customers in boxes priced at VND1.5 million (US$73) each. There were those who paid VND5.3 million for four boxes or VND20.3 million for 16 boxes to be part of the hierarchy.


Like many multi-level, or pyramid marketing companies, Agel created a downline of distributors and a hierarchy of multiple levels of compensation. The sales force was compensated not only for sales they personally generated, but also for the sales of their recruits. 


Agel rented a house at 73 Trang Thi, Hanoi in late 2008 as its headquarters. But in February 2011, it closed the lease and literally disappeared overnight, the Tuoi Tre report said.


The report mentioned no efforts to contact Yen and did not say if the case was being investigated by authorities.


A man who wanted to be identified only as T.H.V., a distributor of Agel in the southern region, said that several months after Agel's disappearance, its retailers began complaining that they had stopped receiving commissions and some did not even receive the products they had paid for.


V. said the more number of people joined the pyramid scheme, the more profit was earned by those on the top of it.


Chu Thi My Huong, an Agel distributor who recruited 23,000 retailers, said between 200-300 of her retailers were hurt by the company's disappearance.


Huong said these people paid for products that they never received, with some losing more than VND15 million.


Many Agel associates, including Huong, are now working for Qivana, which sells functional foods priced between VND700,000-1.2 million a box.


Like Agel, Qivana also urges its associates and distributors to pay for the products in advance, leaving them little time to know the product.


A representative of the HCMC Department of Industry and Trade told Tuoi Tre on Sunday that the city never gave multi-level marketing permission to Agel. 


Last month, department inspectors suspended the Tran Hoang Commerce, Import and Export Company, Ltd., as the company was introducing Agel's products to recruit more than 100 retailers.


The official said that the department could not shut down the company or figure out how many people were working under the Agel network as the company had first operated in Hanoi.


However, a Tuoi Tre investigation found that the company has already registered its headquarters in HCMC.


As of last month, the department had given permission for multi-level marketing to 29 businesses, including two foreign-invested ones.


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