MORE EFFECTIVE SUPERVISION – In recent years, several foreign direct-marketing giants have entered the Philippine market in a big way, eventually producing a modern, market-driven system. These companies, which sell cosmetics and hair care products, beauty and food supplements, soaps and detergents, clothing lines and accessories, employ several thousand sales staff throughout the country.The market-driven companies even hired beauty consultants and sales strategists by the hundreds to explain how to use their products – and sell them. They clearly have high hopes for the Philippine market and like other business entities it had substantially invested and tied up with local beauty and skin care specialists and manufacturers to make their products locally.
However, given the constraint imposed by the prevailing economic crisis, innovative local direct-marketing outfits patterned their sales strategy after the foreign direct-marketing firms and need to cut its dependence on imported products to maintain growth and rely more on domestic activity. As a matter of fact, the vast majority of the thousands of direct marketers in the country including Davao City are employed by some hundreds of new home-grown direct-marketing companies. With so many scrambling for a cut of the burgeoning business, scams are not only unavoidable but virtually definite.
Such shenanigans should be the primary concern of government because direct marketing it seems was growing faster than its ability to control or regulate abuses such as fraud, racket or “pyramid” sales schemes, in which some tricky home-grown direct-sales firms spend more time recruiting sales people than selling products. Remember, a pyramid scheme, although sort of a financial cunning rather than sales brought to the collapse of some previously popular home-grown direct marketing establishments.
Under such circumstances, the natural “buyer beware” instincts of consumers have been dampened by decades of life under a striving economy. Therefore most of the consumers’ concerns can be addressed through more stringent government regulations. Pyramid scheme, scams, and fly-by-night direct-marketing operations are distinctive to unscrupulous local entrepreneurs. Government regulators can refer to the experience of other governments, including the US and some well-developed nations that have learned to make distribution channels more transparent to spot and prosecute scams, and to distinguish legitimate, professionally conducted direct sales from pyramid schemes.
The government could also strengthen consumer-protection agencies by directing some stubborn officials to just not merely present broad smiles and wide grins during media interviews. There is nothing really inherently alien about the concept of direct-market selling. Filipinos have been carrying their goods from house-to-house since the first peddler learned to put wheels on his cart. Indeed, direct selling is part of Asia’s economic fabric, from our very own so-called “Tupperware ladies” of old, to the door-to-door hawkers in China and stockbrokers in Japan.
Ultimately, direct marketing is a necessary part of the country’s own economic transformation. Direct selling is labor intensive – and workers are plentiful in the Philippines. In other countries, for example, thousands of direct-sales ladies dealing in cosmetics, beauty and skin care products make up many company’s domestic workforce. Moreover, a major worry of government in the coming years is to find enough jobs for the new unemployed graduates, not least to forestall social unrest.
Any government does not want to prohibit business activities that can provide jobs. But product distribution in the country has always been a problem because of some scheming and greedy entrepreneurs. Nevertheless, it can be solved in part by the activities of thousands of hustling but thoughtful businessmen moving products all over the country. The crucial answer to the abuses and excesses they commit is more factual and effective supervision, not sweeping prohibition.
