KUALA LUMPUR, 24 OCTOBER 2023 – Direct Selling Association Malaysia (DSAM) and Lazada, Southeast Asia’s pioneer eCommerce platform signed a Memorandum of Understanding (MoU) as part of a strategic collaboration to strengthen oversight of product sales of the Direct Selling industry on Lazada e-Commerce platform. This landmark MoU represents the inaugural partnership between 145 DSAM Member Companies and Lazada Malaysia, under the guidance and support of the Ministry of Domestic Trade and Cost of Living (KPDN). KPDN regulates the Direct Selling Industry through the Direct Selling and Anti-Pyramid Schemes Act 1993 [Act 500] which requires members of DSAM, Direct Selling companies and its authorized distributors to have a valid approval. This first-ever initiative permits only registered distributors with a Letter of Authorization (LOA) to directly market Direct Selling products on the Lazada platform.
KPDN Senior Director of Distributive Trade & Business Sector, Dato’ Rohaizi bin Bahari, who witnessed the MoU signing said, “The Ministry is of the view that this partnership will give rise to a fair and harmonious business landscape, and increase consumer confidence in buying direct sales products through online platforms. This effort will also ensure quality and authenticity of products are maintained for a safer online ecosystem. The Ministry encourages such future collaborations which adds value to the growth of domestic trade and in contributing to the national economy in general, through direct selling industry”. Tan Sri Dr. Noor Hisham, DSAM Code Administrator, jointly witnessed the MoU signing event.
Recognizing the pressing challenges, the MoU will implement rigorous measures proactively to enhance and strengthen oversight of DSAM Member Companies’ product sales on Lazada Malaysia. DSAM and Lazada will join hands in an effort to ensure product quality and authenticity, contributing to a safer online ecosystem for both consumers and sellers. Official supporting documents such as a copy of the direct selling license, as well as the letter of authorization (LOA) by DSAM Member Companies need to be submitted by the sellers prior to onboarding and operating their online store on Lazada. For all existing sellers of Direct Selling products on Lazada, a LOA must be obtained.
“Through this MoU, sellers on Lazada can be authenticated as legitimate sellers of DSAM Member Companies’ products through a joint-approval process from DSAM Member Companies and Lazada. This will enable us to establish a legitimate business landscape and foster sustainable entrepreneurial growth from Malaysia’s current base of 4 million distributors nationwide,” said Zaihan Ariffin, DSAM President.
Direct Selling distributors complying with the Act 500 face challenges posed by those who sell DSAM members’ products without adhering to industry’s prescribed conditions. The situation has led to the proliferation of counterfeit products, cross border unregistered products, items with unapproved claims, unauthorized pricing issues and altered products, as well as instances of abuse and scams, all of which have had detrimental effects on both the DSAM Member Companies and their distributors. The collaboration with Lazada ensures that Direct Selling products purchased through authorized sellers with LOAs are genuine and supported by the principal Direct Selling companies.
“This partnership is all about trust and assurance. It ensures that the consumers would be able to buy quality products and authentic goods from the brands’ trusted authorized sellers on Lazada platform. With strong support and strategic collaboration with the Ministry and DSAM, Lazada strives to provide the best for our customers and sellers as we contribute towards a thriving digital economy,” said Alan Chan, Chief Executive Officer of Lazada Malaysia.
The Direct Selling industry is one of the most highly regulated industries in Malaysia with KPDN requiring all Direct Selling companies to have a valid Direct Selling License (AJL), highlighting the compliance with the Act 500, its associated regulations and the AJL guidelines. These measures are crucial in preserving the industry integrity.
The AJL guidelines also incorporate provisions for price control and various strategies aimed at fostering a correct and favorable perception of the Direct Selling industry. This is essential to combat negative stereotypes such as ‘get-rich-quick’ and pyramid schemes perpetrated by some unscrupulous individuals and companies.
Currently, Malaysia has over 400 AJL holders, all committed to upholding the highest industry standards. DSAM has been ranked Platinum status, the highest of its ranking, by the World Federation of Direct Selling Associations (WFDSA) amongst associations in 62 countries.
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