Panel Discussion on International Regulation Lawrence Cheah, Executive Director, Direct Selling

Association of Malaysia

Mark-e-Dir: Bringing Market to Consumers

Wednesday, 17th April, 2013New Delhi

Direct Selling in MalaysiaA Government / Private Sector Perspective

17th April 2013

INTRODUCTIONDirect Selling in Malaysia

MALAYSIA

Size : 329 847 km²Administration : 13 States, 3 FT

Population : 28 million

50.4% Malay23.7% Chinese11.0% Indigenous7.1% Indian7.8% Others

Putrajaya

DSAMDirect Selling Association of Malaysia

TIMELINEDirect Selling in Malaysia

Street Vendorsgoing

Door-to-Door

Pre-1970s

1970s Significant presence of foreignDirect Selling Companies

1978 Formation of DSAM by 4 Companies

TIMELINEDirect Selling in Malaysia

1998 DSAM launched Code of Conduct•Conduct for the Protection of Consumers•Conduct towards Direct Sellers•Conduct between Companies•Code Enforcement•Recognised by WFDSA and endorsed by MDTCC

2009

1993 Direct Sales Act 1993•Definition - MLM, SLM, MO

•Regulations

•Offences

•Schemes and Conduct

•Requirement for a renewable Direct Sales License

DSAM’s Code of Conduct enhanced•Extra Territorial Effect

TIMELINEDirect Selling in Malaysia

2011 Amended Act passed in Parliament and enforced•Direct Sales and Anti-Pyramid Schemes Act 1993•Clear definition of Pyramid Schemes•Enforcement by Task Force – MDTCC, Police, CCM, Central Bank

2011

2010 Drafting of Amendments on Direct Sales Act 1993•Close collaboration between DSAM / MDTCC (Private Sector / Government initiative)

Drafting of National Code of Ethics

2012 Drafting of Direct Selling Blue Print

TIMELINEDirect Selling in Malaysia

2012December

Launch of Direct Selling Blue Print•3 phases - 2013 to 2015

- 2015 to 2018

- 2019 & 2020

•3 main principles - Improving the Quality of Human Capital (Education, Full-time, etc)

- Strengthening the Legal and Delivery Systems (Self Regulation, Advisory, etc)

- Enhance the reputation and performance (USD 6.7 bil by 2020, avg USD 1,300)

2012June

Launch of National Code of Ethics•For non-DSAM Members

2020

SALES TURNOVERDirect Selling in Malaysia

PRODUCT RANGEDirect Selling in Malaysia

DISTRIBUTION – GENDER, RACEDirect Selling in Malaysia

Distributors by Gender Distributors by Race

DISTRIBUTION - AGEDirect Selling in Malaysia

REGULATORYDirect Selling in Malaysia

Ministry of Domestic Trade, Co-Operatives and Consumerism (MDTCC)

o Direct Sales and Anti-Pyramid Schemes Act 1993 (Act 500) (573 AJLs)

MLM (73%), SLM (20%), PO (4%), SLM/PO (3%)

o Others : Competition Act 2010, Price Control & Anti-Profiteering Act 2011, Consumer Protection Act 1999

Ministry of Health

o Product Registration for Health Supplements and Notification for Cosmetics

o Asean Harmonization

Ministry of Finance

o Finance Act 2012

o GST

Ministry of Information, Communication and Culture

o Personal Data Protection Act 2010

ENDDirect Selling in Malaysia

Direct Selling in Malaysia

17th April 2013

Thank You For Your Time