Panel Discussion on International Regulation Lawrence Cheah Executive

Panel Discussion on International Regulation Lawrence Cheah, Executive Director, Direct Selling Association of Malaysia Mark-e-Dir: Bringing Market to Consumers Wednesday, 17 th April, 2013 New Delhi

Direct Selling in Malaysia A Government / Private Sector Perspective 17 th April 2013

INTRODUCTION Direct Selling in Malaysia MALAYSIA Size : Administration : Population : 329 847 km² 13 States, 3 FT 28 million 50. 4% 23. 7% 11. 0% 7. 1% 7. 8% Putrajaya Malay Chinese Indigenous Indian Others

TIMELINE Direct Selling in Malaysia Street Vendors going Door-to-Door Pre-1970 s Significant presence of foreign Direct Selling Companies DSAM 1978 Formation of DSAM by 4 Companies Direct Selling Association of Malaysia

TIMELINE Direct Selling in Malaysia 1993 Direct Sales Act 1993 • Definition - MLM, SLM, MO • Regulations • Offences • Schemes and Conduct • Requirement for a renewable Direct Sales License 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 DSAM’s Code of Conduct enhanced • Extra Territorial Effect

TIMELINE Direct Selling in Malaysia 2010 Drafting of Amendments on Direct Sales Act 1993 • Close collaboration between DSAM / MDTCC (Private Sector / Government initiative) 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 Drafting of National Code of Ethics 2012 Drafting of Direct Selling Blue Print

TIMELINE Direct Selling in Malaysia 2012 Launch of National Code of Ethics • For non-DSAM Members 2012 Launch of Direct Selling Blue Print • 3 phases 2013 to 2015 June December - • 3 main principles 2015 to 2018 2019 & 2020 - Improving the Quality of Human Capital (Education, Full-time, etc) - Strengthening the Legal and Delivery Systems (Self Regulation, Advisory, etc) 2020 - Enhance the reputation and performance (USD 6. 7 bil by 2020, avg USD 1, 300)

SALES TURNOVER Direct Selling in Malaysia

PRODUCT RANGE Direct Selling in Malaysia

DISTRIBUTION – GENDER, RACE Direct Selling in Malaysia Distributors by Gender Distributors by Race

DISTRIBUTION - AGE Direct Selling in Malaysia

REGULATORY Direct Selling in Malaysia Ø Ministry of (MDTCC) o Domestic Trade, Co-Operatives and Consumerism 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 Ø Ministry of Health o Product Registration for Health Supplements and Notification for Cosmetics o Asean Harmonization Ø Ministry of Information, Communication and Culture o Personal Data Protection Act 2010 Ø Ministry of Finance o Finance Act 2012 o GST

END Direct Selling in Malaysia Thank You For Your Time Direct Selling in Malaysia 17 th April 2013