On March 2, 2025, the National Competition Committee announced the termination of the direct sales operations of Siberian Health International and revoked the company's business license. Based in Thanh Xuan District, Hanoi, this move marks the latest scrutiny on the direct selling industry, which is grappling with regulatory challenges and declining revenue.
The company, directed by Artiukova Mariia, who holds Russian nationality, faced this drastic decision due to its failure to meet legal obligations required for operating within Vietnam's legal framework. The Committee stated, "Direct selling is a legal business sector but can easily be exploited for fraud and illegal fundraising, negatively affecting society." This insight sheds light on the delicate balance the industry must maintain between legitimate business practices and the potential for exploitation.
Following the revocation of its license, Siberian Health International took immediate steps, sending a formal request to release its deposit held at Vietcombank. The National Competition Committee provided guidelines indicating the next steps for involved participants. The committee urged sellers associated with Siberian Health to inform the Ministry of Industry and Trade if the company had not fulfilled all regulatory responsibilities. A deadline was set until March 28 for these notifications to be submitted. Should no response be received by the Ministry from participants or authorities, the company would then be allowed to access its frozen funds as permitted by law.
The direct selling industry reflects broader economic patterns and potential pitfalls, reporting more than 768,000 individuals engaged and cumulative earnings of 16,800 billion VND, which denotes a significant 20% drop compared to the previous year. This downturn raises questions about the future viability of direct sales as consumer behavior shifts and regulatory measures tighten.
With notable players such as Siberian Health International now suspended, industry experts are observing the situation closely. This move may prompt other companies within this sector to evaluate their compliance with legal standards to avoid similar fates. The repercussions of this decision could resonate beyond just one company; they may indicate the increasing vigilance of regulatory bodies around the issues of consumer protection and business ethics within direct selling.
Overall, the suspension of Siberian Health International serves as more than just the end of one company's operations. It highlights the growing challenges faced by the direct selling industry amid increasing scrutiny and the potential for stricter regulations. The government of Vietnam seems committed to implementing tighter controls to safeguard against fraudulent activities, compelling businesses to adhere strictly to compliance guidelines.
With the direct selling industry at this crossroads, stakeholders will need to address operational practices and consumer trust effectively. The recent decline and regulatory scrutiny paint a picture of caution for all involved, emphasizing the necessity for transparency and ethical practices. The coming months may reveal how the sector adapts to these changes as companies evaluate their operations to align them with both consumer expectations and regulatory demands.