Oriflame distributor closes its gates in Vietnam

Stella Ivy Cosmetics, one of the largest Oriflame distributors, has announced shutting down in Vietnam

The Ministry of Industry and Trade’s Vietnam Competition Agency (VCA) received a dossier from Stella Ivy Cosmetic announcing that it will terminate its operations. The company was granted the enterprise registration license for the first time in August 2002. It had an annual revenue of over VND1 trillion ($43.48 million).

Previously, in August 2018, the VCA decided to issue a fine of VND170 million ($7,400) to Stella Ivy Cosmetic Co., Ltd. located at 100-102 Nguyen Van Troi Street, Phu Nhuan district, Ho Chi Minh City. This company did not follow or improperly implemented its obligations on revoking multi-level sales member cards.

Stella Ivy Cosmetic conducted multi-level sales in centrally-run cities and provinces without approval from the provinces/cities' departments of Industry and Trade. The company, which distributes Oriflame cosmetics products, did not carry out or improperly implemented its obligation of training sales staff for its multi-level network, and there were no signed labour contracts between Stella Ivy and its sales staff.

Along with Stella Ivy Cosmetic, numerous multi-level marketing companies were applied fines due to their violations.

Notably, Greenlife Corporation (Pho Yen town, Thai Nguyen province) was fined for VND510 million ($22,170) for conducting multi-level sales activities without the approval of the Thai Nguyen Department of Industry and Trade. Additionally, the company’s amended business registration certificate did not include some of the company’s activities among the fields of operation.

Besides, Unicity Marketing Vietnam Co., Ltd., based at 141 Cong Hoa Street, Tan Binh district, Ho Chi Minh City, a multi-level company selling functional foods, was penalised for VND240 million ($10,430) for violating regulations on the announcement of its headquarters and information on its multi-level sales network.

According to the statistics published by the Ministry of Industry and Trade, in 2018, Stella Ivy Cosmetic was the multi-level marketing company attracting the most members across the country, with 371,547 members, accounting for 52.53 per cent of people joining this business model. The runner-ups are Amway Vietnam (11.18 per cent), New Image Vietnam (10.12 per cent), and Herbalife (6.21 per cent).

The revenue of these companies come from food supplement (71 per cent), cometics (23 per cent), as well as household items and clothes (6 per cent).