(Business in Cameroon) - Cameroon’s Minister of Commerce, Luc Magloire Mbarga Atangana, signed a decision last March 8 suspending the activities of Qnet Africa Market Development Cameroon Sarlu all across the national territory. The company is accused of "misdirecting the purpose of the approval granted to it per the decree of August 12, 2021 (...) and illegal commercial practices (...), facts committed to the detriment of the populations of the department of Menoua, Western Region”.
A source inside the ministry said the suspension decision was taken to "preserve public order pending clarification". In detail, pending the results of the ongoing investigation, which could lead to a definitive withdrawal of its approval, Qnet is accused of having engaged "in a kind of scam and plundering of people, through a pyramid scheme of distribution of products, and the promise of false compensation,” according to a source close to the matter. The pyramid scheme is a type of business model within which distributors are set up as a pyramid-shaped network. Each distributor recruits a new one and gains commissions on their sales. The model is considered illegal in many countries, including Cameroon.
As a reminder, Qnet has already been accused of pyramid selling in Iran, Sri Lanka, Indonesia, Rwanda, Australia, Burkina Faso, and Guinea. In a 2019 report by Chad's National Financial Investigation Agency, the Asian group, which claims partnerships and sales offices in more than 25 countries around the world, and customers in about 100 countries, was portrayed as "a criminal organization."
Pyramid selling versus direct selling
"After I read the report and understood the circumstances in which it was written, I finally realized, without no judgment, that the Chadian agency did not have all the information that could have helped it better understand the activity. The model of direct sales by a network is a global industry of more than 200 billion dollars and with more than 120 million distributors,” said Biram Fall, Qnet's General Manager for the sub-Saharan Africa region, during a meeting with Chadian media in July 2021 in Ndjamena.
Indeed, despite the multiple accusations of fraud made against it, the Qnet Group still claims it is a company specializing in "direct sales". "Direct selling is a retail channel used by various companies around the world. Both large global brands and small businesses use direct selling as a method to market products and services to their customers. Direct selling as a sales channel differs from the traditional business-to-consumer (B2C) marketing approach. Direct selling incorporates an additional aspect of the sales experience. It is not only focused on getting great products and services into the hands of consumers, but it also creates an avenue for people interested in entrepreneurship to work independently, to create their own business with relatively low risk," explains Biram Fall.
The Qnet manager also explained that "Qnet's direct selling business is simple. We reward our distributors for selling the products they use and love. The more products they sell, the more commissions they earn. The only way to earn income with Qnet is through product sales. When someone buys a product from Qnet and also decides to take advantage of the business opportunity, they sign up as a Qnet Independent Representative (IR). This makes them distributors who promote our products and benefits to their friends and family. And if someone purchases our products using the distributor's ID, that particular sale is credited to the distributor. Qnet uses a compensation plan that calculates the commissions payable to the distributor, based on the sales they have generated and credited to them. Many entrepreneurs have taken advantage of our business model to build a sales team and earn additional income”.
Brice R. Mbodiam