Prospective Direct Selling Industry
Compass, 21 April 2016
JAKARTA, KOMPAS – direct sales industry is considered quite prospective to grow further in Indonesia. It is supported by the demographic bonus population predominantly young and productive age and the development of middle class in Indonesia.
“About 70 percent of Indonesia’s population of productive age. Conditions like this are rare. Japan never experienced in 1950 and were able to use the momentum of the large number of productive age, “said Chairman of the Direct Selling Association of Indonesia (APLI) Djoko Hartanto Komara, Wednesday (20/4), in Jakarta.
Bonus demographics in Indonesia is estimated peaked in 2030 before declining. One of the challenges facing Indonesia from the demographic bonus is 60 percent of the population of productive age are not ready to work.
“In addition to the level of welfare, the direct selling industry could be one of the answers to improve human resources because no training at all levels,” said Djoko.
Referring to data from the World Federation of Direct Selling Association, the total value of the direct selling industry worldwide in 2014 amounted to 182.823 billion US dollars.The transaction value of this direct sales rose about 14 percent compared with the previous year.
However, the contribution value of the direct selling industry is not evenly distributed.The five largest contributor in the global direct selling industry is the United States, which contributes about 19 percent, China 17 percent, Japan 9 percent, South Korea 9 percent, 7 percent and Brazil.
Value of Rp 12.6 trillion
In 2014, the direct selling industry in Indonesia involves about 11.74 million direct sellers. The average annual growth of the direct selling industry in Indonesia 2011-2014 period amounted to 11.3 percent. “The value of direct selling industry in Indonesia in 2014 about Rp 12.6 trillion,” said Djoko.
Djoko said, APLI has proposed that the article on the prohibition of money game or pyramid schemes included in Act No. 7 of 2014 on Trade. This is because the pyramid scheme is often equated with the practice of direct sales. This makes direct sales penetration becomes constrained.
Head of Public Relations APLI Andam Dewi said that in Indonesia is estimated there are more than 300 companies engaged in the direct sales industry. About 200 of these companies already have a business permit direct sales (SIUPL). A total of 86 direct sales company is a member of APLI.
“Today APLI continue to socialize and educate people about the direct selling industry and the difference with the money game,” said Andam Dewi.
Cel record eight traits legal direct sales. First, the company must have a legal direct sales and marketing authorizations SIUPL products issued Agency for Food and Drug Administration, Department of Health, and others.
Second, each company must have a legal direct sales of products traded or sold. Third, business schemes emphasized on product sales and not a ranking.
Fourth, commission payments based on product sales and not the quantity of recruitment. Fifth, a member of the direct selling industry can still earn revenue from the sale of products even without recruiting.
Sixth, legal direct sales companies have a rational system of product returns. Seventh, the products traded direct sales company has a fair market value. Eighth, the product is worth more to attract purchased or consumed by the general public.
APLI has fought for Indonesia has laws against money game for a long time, namely since I was active in 2006. APLI board already this fight even before 2006. Beginning his goal is to have a separate law that combats money game. However, many are pessimistic about this to call it mission imposible. When I became Chairman of the Taskforce anti-money game APLI In 2011, legislation was formed with the aim of proving to regulators and legislators that the money game is dangerous. We hope to establish a law, or at least government regulation (PP) or Regulation (Candy) .No root cane was so. However, if in the form of regulation or candy, then it can not be criminal sanctions, only civil sanctions alone. This, less deterrent effect to the perpetrators.
In 2013 when I had served as chairman of APLI, through talks with Pak Ardiansyah Parman at Hotel Borobudur in April 2013, it is known that the government was making the draft Law of Commerce. During this legal product similar legislation in the field of trade is the law of the Dutch Trade Ordinance of 1934 which is more concerned peizinan effort. I see this is a bright spot and a golden opportunity for APLI to propose incorporate some of the provisions to combat money game.
A small number of regulators are found in APLI struggle clicking “goal” the laws against money game is an effort of a group of entrepreneurs who are members in APLI so that the business is protected. To reject suggestions that one of these, through a chance meeting with the decision makers and as a meeting to discuss the revision of DIN (List Investment Negative) dated May 3, 2013 relating to the AFTA, which was attended by 14 ministries, the Chamber of Commerce and 19 associates various fields I convey the data that the 2012 all direct sales company (with the number of 160 companies) that have won SIUPL listed in BKPM, had a total turnover of 10.2 trillion rupiah for one year. On the other hand, the money game company has a turnover of 16.5 billion in 1-2 years, some even up to 18 trillion. You can imagine the velocity of money money game is much larger, and the victims are mostly the general public. Only a small part of society MLM involved. It can be seen that the direct victim is the general public while the indirect victims are the direct selling industry that his image be negative, because many companies money game masquerading as a direct sales company / MLM. By involving funds of that was to be entered in the national interest of this nation that is soon to be made to prevent it.
With these efforts eventually regulator can be assured that the legislation against money game so need to be made in order to protect the public. I remember at 21:00 I received a call asking what the regulator that APLI proposal to combat money game that will be incorporated into the Draft Law on Trade. Regulators also asked it be delivered tomorrow at 10:00 am in a meeting at the Ministry of Trade who will discuss the Bill Trading. Phone it gives me tremendous spirit, because the question is what APLI fighting for so many years that makes me and Mr. Bayu Riono overtime until midnight to formulate problems facing the direct sales industry.
But in fact, requested is in the form of proposed chapters, so it needs some time to formulate. Unfortunately, it was too late for the bill of material Trade, Investment Issues List also has finished processing has been given to the government and Parliament to be studied. So, for now a possibility APLI proposal can go through the government. And the opportunity is left only enter through the House. I remember a task force to dissect the case of TVI. At that time, APLI involving Commission III and Commission VI of the House of Representatives.
At the moment I’m in the process of contacting the Parliament, suddenly my old friend Mrs. Tina Silaen call on Friday morning and asked how her husband said that he, Mr. Sukur Nababan wanted to meet with me as chairman of APLI that same evening. But unfortunately, at that time I already had another appointment. However, because Mr. Sukur calling direct and stated that the meeting is urgent, be met at three o’clock. Incidentally Mr. Sukur Nababan is a member of House Commission VI, and he is the active players in the direct sales industry. He has the same vision with me and APLI in combating and preventing the practice of the money game, in order to protect the people of Indonesia nationally. He is the right person. If he was not the perpetrator of the direct selling industry, you can imagine I will need more time to explain and menyakinkannya, which would be too late. Even though he invited me for other purposes, but the proposal APLI to combat money game and protection against selling products directly in the Bill of Commerce became the main menu of our perbicangan which takes approximately 5 hours. We discuss the definition of a pyramid. It’s all the movements of the hand of God that helped me. DIM (List of Issues Investment) for the trade bill should be given on a Saturday morning, eventually postponed until Monday, so I have two days to finalize the formulation of the chapters. DIM was completed on Saturday. However, after discussions with the Board of Commissioners APLI, some of the proposed changes. This material was finalized on Sunday, so that appropriate Mondays I can convey to Mr. Sukur Nababan.
As for the rationale and proposed APLI of anti pyramid clauses (a term that replaces the money game, was selected after a long study, all countries also use this term to refer to the money game), as follows:
Practice Pyramid Scheme
Many actors who take advantage of public ignorance to outwit and promising instant profits without having to work. They collect funds from the public by referring to join in business activities in the guise of direct selling tiered. In practice profits / bonus is distributed comes from fees collected from those who join later, to pay the person who recruited him along with top networks. This concept is known as the Pyramid scheme. For example, with a ratio of 1: 5, and to pay bonuses 1 person needed the money for a deposit from 5 people who join, and then to pay for 5 people, it takes money out of 25 people who join, and so on. By doing so, one day the dollar amount of new people is not sufficient speed to pay people who have signed later. That’s where the point of bankruptcy or a time bomb has exploded. Actors who perform this practice has been realized from the beginning and will carry off the money collected before the time bomb explodes. While in the direct sales business tiered correct, bonus obtained from products sold. During this time, there is no such regulation. Such practices are known after their offense warranting complaint. That means that fraud has occurred and can not be addressed let alone prevented. Therefore we assess the need for legislation to provide a deterrent effect and the penalty and can stop this practice before suffering many casualties and it was too late. Such practices, had a lot of people adversely affected by: Attracting funds from the public by promising profits doubled in the near future. Though the promised benefits are taken from the registration fee those who join later. Registration is used as a cover as towing funds from the public. The registration fee in bulk to be bundled with the items that are not comparable in value to the money deposited, so that the product be used as a cover for towing large fund registration. The direct victims of this practice is the wider community in the history of impaired until the amount trillion rupiah so that it can be classified to the national interest. While direct sales businesses tiered become indirect victims. The image of entrepreneurs have become negative in the eyes of society.
Protection products marketed by direct sales (direct selling).
The lack of regulation to protect small entrepreneurs independent in the conduct of its business, in direct selling. The practice of direct selling is the sale directly with the aim of protecting small businesses independent of conventional retail businesses that sell systems outlets such as shops, supermarkets, mini markets, etc.
In conventional systems the outlet retail sales are passive waiting for a buyer to come, so as to provide an introduction to the required product marketing strategy of mass communication where this requires costs have been factored into the price of products.
While in the direct selling marketing system though mass communication is still required, but is still able to run, because the forces are active seller and the buyer picked explain the benefits, how to wear, and the advantages of its products. If a product has been well explored by the direct selling system so understanding (awareness) product known by the people it is supposed that product still marketed exclusively by direct selling system so that the labors of power pemasarnya who had been a guerrilla for years were not harmed by the outlets -gerai general. The necessary existence of regulations that protect the small independent entrepreneurs for products to be sold direct selling are not allowed to be sold digerai-conventional outlets. Based on these premises, we propose the existence of a regulation that protects, against: (note: the text in italics and bold is in addition to what we mean)
Recognition of a tiered system of direct sales marketing literally on the Bill Trading:
APLI proposed additions to the draft Law on Trade RI, as follows:
1) Addition in Article 5 to be:
Distribution of goods and / or services trade
directly or indirectly to the
consumers can do with the system:
a. General trading;
c. Direct sales;
d. Tiered direct sales; or
e. Another marketing system
Then followed the addition of the “Explanation on the Draft Law on Trade RI”, as follows:
What is meant by “direct sales” (direct selling) is a method of selling goods and / or services directly to consumers outside the fixed retail location.
What is meant by “direct sales tiered” (Multi Level Marketing) is a method of selling goods and / or services with a system of direct sales through a network of multi-level marketing developed by business partners who work on commission basis and / or bonuses based on the sales of goods and / or services to consumers.
Referred to other marketing system is the marketing in addition to general trade, franchising, direct sales or direct sales stages.
The addition of Article Admitted:
APLI proposed adding a separate chapter to regulate the industry and the Direct Sales Direct Sales Berjenjang on the draft Law on Trade RI. Settings include the protection of a pyramid scheme and protection products marketed by direct sales. Proposed as Article 9 before going to Part Three:
(1) Distribution of goods and / or services whose trade directly or indirectly prohibited from applying the system of pyramid schemes.
(2) Distribution of goods and / or services that have the exclusive distribution rights for trafficked with the system of direct sales and / or direct sales tiered, can only be marketed by direct sales by sellers who officially registered as members of the company’s direct sales and / or direct sales the tiered.
(3) The distribution of goods and / or services that have the exclusive distribution rights for trafficked with the system of direct sales and / or direct sales tiered should not be done by the system as referred to in paragraph a, b, and e in chapter 5, except by parties appointed or received official permission from the company’s direct sales and / or the direct sales tiered.
(4) The Company’s direct sales and / or direct sales tiered can trade goods and / or services that do not have the exclusive distribution rights, but the goods and / or services are not included specified in paragraph (2) and (3) Article 9.
Then followed the addition of the “Explanation on the Draft Law on Trade RI”, as follows:
Article 9 Paragraph (1)
What is meant by “Pyramid Scheme” is a business with a name or nomenclature to which the participation of business partners based on consideration of the opportunities to earn rewards derived or obtained mainly from the cost of the participation of others who join later or after the joining of partners such business, rather than results activity of selling goods and / or services.
The definition of a pyramid scheme is being used effectively, as stipulated in the Regulation of Minister of Trade No.32 / M-DAG / PER / 8/2008 in article 1, paragraph (12), the difference is only said the results changed the cost (in writing in italics and underline). Because the result word can be extensive and can be ambiguous.
What is meant by “the exclusive distribution rights” are the rights to distribute the goods and / or services owned by only one company in the territory of Indonesia, which is obtained through the agreement of the owner of the trademark and / or indeed the trademark owned by themselves.
What is meant by a “seller of officially registered” is a business partner that has been registered officially a member of the direct selling company and / or direct sales stages.
What is meant by “a party appointed or received official permission” is a party that has a license to trade products with a system of outlets public and / or referred to in letters a, b, and e in article 5, which is intended to be the center of inventory in certain areas to serve the salesperson official and user of goods / or services or received official permission to do exhibitions, Ekpo, etc.
The addition of Article Admitted in Chapter XV
APLI proposed adding there is a separate article to give deterrent effect of sanctions on violators.
Proposed after Article 66 in the draft of Trade (if not shifted due to the addition of article):
(1) Every business performers who perform the activities referred to in Article 9 paragraph (1) shall be punished with imprisonment of 5 (five) years and / or a fine of Rp 25,000,000,000.00 (twenty five billion rupiah)
(2) Every business performers but did not get permission to market as referred to in Article 9 paragraph (2) shall be punished with imprisonment of 1 (one) year and / or a fine of not more Rp.1.000.000.000,00 (one billion rupiah)
(3) Every business performers to market with systems other than direct sales outside the permit as referred to in Article 9 paragraph (3) shall be punished with imprisonment of three (3) years and / or a fine of not more Rp.5.000.000.000,00 (five billion rupiah)
Then followed the addition of the “Explanation on the Draft Law on Trade RI”, as follows:
What is meant by “Businesses” is the perpetrator as the owner of the company and / or business partners actors direct sales tiered network builders who have recruited directly at least 10 people and / or affect at least 50 people to join.
That original proposal and rationale of APLI, and although there are also changes article sentences and some proposals are not approved but nearly 90% APLI proposal inserted into the Trade Act on 11 February 2014 was decided by the plenary session. Then on March 11, 2014 was signed by President Susilo Bambang Yudhoyono became Law No. 7 of 2014 on Trade. Now it APLI was fighting to guard and ready to assist law inforcement government to Law No. 7 of 2014 pertaining to the direct sales industry can provide a deterrent effect to elements that harm the community through the practice of the pyramid. At present, the business is in the process of providing input to the government in revising the regulation on direct selling industry in adjusting the matter by Law No. 7 of 2014 on Trade. My hope these chapters useful in preventing the fall of many victims and provide prosperity for as many people in Indonesia.
Moreover, the legal framework is able to ensnare the individual individual is not only the owner of the company, so companies money game-based e-commerce and rely on the website (this type of company does not open a representative office in Indonesia to avoid legal and tax) may be charged and prosecuted , Come with a sincere intention, we shoulder to shoulder to eradicate the practice of money games that harm the nation.
Article approved the Law on Trade of the Republic of Indonesia 7 (B erlaku began March 11, 2014)
3) Distribution of Goods is directly referred to in paragraph (1) is done by using a special distribution through direct sales system:
a. single level; or
Goods with exclusive distribution rights were traded to the direct sales system can only be marketed by authorized seller registered as a member of the direct selling company
Business communities are prohibited from applying the system distribution pyramid scheme in distributing goods
Explanation pyramid scheme Article 9: Yg meant with “pyramid scheme” is a term / name of business activity that is not the result of sales activities Goods dr. The business activities that take advantage of the opportunities the participation of partners attempt to tackle obtaining payment or participation fee income primarily from other people who join later or after the merger of TSB business partners.
Business communities are implementing distribution system pyramid scheme in distributing goods as referred to in Article 9 shall be punished with imprisonment of ten (10) years and / or a maximum fine of 10,000,000,000.00 (ten billion rupiah).
Business communities do not have trade business activities in the field of trade licenses granted by the Minister as referred to in Article 24 paragraph (1) shall be punished with imprisonment of 4 (four) years or a maximum fine of 10,000,000,000.00 ( ten billion rupiah)
People are encouraged to try and jelly in selecting a business partner
The Ministry of Communications and Information Technology ordered Internet service providers to block access to web sites related investments 20 Mavrodi Mondial Money Box or known Human Help Humans (MMM). Blocking was originally requested by the Financial Services Authority (FSA).
Before deciding to block, Kemenkominfo submit the request to the panel illegal investment, fraud, drugs food, gambling, and drugs in the Forum Handling Negative Charged Internet Site (PSIBN), to further examine related MMM’s website.
Recommendations blocking was also taken after the Panel was informed that Sergey Mavrodi, MMM system maker, has been imprisoned in Russia for MMM; Indian law enforcement agencies have arrested several people linked MMM activities in India; and chairman of the Indonesian Ulema Council looked MMM activities is usury and haram.
According to the Head of Information and Public Relations Kemenkominfo, Ismail Cawidu, the panel finally propose it to be 20 MMM-related websites is blocked. Here’s the full address of the 20th the website:
In a press release on the website Kemenkominfo, Cawidu explain at least three considerations raised panels as the basis for the blocking of 20 websites or pages of this MMM.
First, MMM page does not have a Legal Entity and Legal Domicile conducting electronic transactions. Second, do not have a clear organizational structure. Thirdly, the statement of public concern over the funds used to follow the activities of MMM.
The government considers the charge information in the MMM sites are potentially detrimental to the public and cause unrest. “To prevent the increasing potential for loss of society, it is necessary to unblock the top of the page MMM,” Ismail wrote.
Government relations field in this case relating to BPOM & Customs wants to share information updates pertaining to Rule of Law BPOM and Halal. The Regulations update the Regulation is
1. Law No. 33/2014 on Halal Product Guarantee
2. Perka BPOM relating to Prohibition and Warning Supplement
3. Perka BPOM related to Clinical Trial
4. PerKaBPOM related to Food
5. Draft Perka POM
Tuesday 11 February 2014, the government has enacted the Law of Commerce.Through this legislation, one of which the government recognizes and protects indtrustri MLM / DS (Multi Level Marketing / Direct Selling). Through Articles Multi Level Marketing in the Trade Act, the public can see the difference between MLM / DS (Multi Level Marketing / Direct Selling) true & Money Game masquerading as MLM (Multi Level Marketing). And the point is MLM (Multi Level Marketing) recognized and protected while pyramid schemes are prohibited. Hopefully with this Act, the distributor can be strong and courageous in doing business. Thanks.
Daftar Perusahaan yang mendapat SURAT PERINGATAN dari BKPM (Badan Koordinasi Penanaman Modal)
Daftar pesahaan tersebut per 20 Maret 2014 adalah :
Untuk info detailnya klik link diatas.