Though network marketing has taken off in Egypt, it is still perceived with much suspicion, reports Nesmahar Sayed "Dear friend, I've started a new business. I'd like to meet you to tell you all about it, and for you to become my partner. For your sake, the sooner you meet me, the better!" Over the past two years, many people have heard such lines over the phone, but when the person at the receiving end asks about the kind of business involved, the reply is always the same. "Not over the phone," the caller will say. "We should meet so I can show you the plan." This is how members of network marketing companies approach their clients. The business plan they share claims to solve all financial problems while giving people the opportunity to get rich. The investment needed to start is set at the price of the product sold by a given company. This price ranges from $100 to $13,000. The more people the networker refers to the company, and who buy the company's products, the more profit he or she will make. The compensation plan and the kind of products on offer are what differentiate participating companies from one another. Product purchasing happens on Internet, because all participating companies are categorised as 100 per cent direct selling e-commerce businesses. At the moment, three network marketing companies are operating in Egypt, namely QNet, Goldmine International and BonVoyage 1000. QNet was the first to enter the Egyptian market two years ago, and because of "the great increase in the number of consumers of the company's products in the last year, the company decided to open a local office in Cairo by the end of 2011," QNet's Zaheer Merchant, director of corporate affairs, told Al-Ahram Weekly. While he would not give an exact figure, Merchant said that over the past year, sales in the Egyptian market increased to reach 17 per cent, "and we are hoping to reach 20 per cent." Khaled Diab, regional general manager for QNet in the Middle East and North Africa, added that the number of company members in Egypt exceeds those in Saudi Arabia and the United Arab Emirates. QNet's new office is a reflection of the company's policy to make its services more local, in a bid to meet growing demand. "Entering the Egyptian market is an important step in strengthening the company's position in the Middle East," Merchant said during a roundtable discussion with journalists, at which the company announced its strategic plans to expand business in Egypt. The company was not deterred by the fact that post-revolution economic conditions have caused many businesses to close down. In Merchant's view, opening a local office during these times is very much in line with the company founders' philosophy. "We started our business in 1998, during the economic crisis in Asia," he said. Diab went on to say that network industry sales tend to increase during recession. "Direct selling is a profession that does not need experience or skills before joining. It is taught through training on how to sell services and products, and that attracts networkers to come into the field from all backgrounds and professions," Diab told the Weekly. In fact, network marketing has succeeded in attracting many suitors precisely because of the slowdown in the economy and the lack of jobs. Mariam Abu Youssef, marketing professor at the German University in Cairo (GUC) adds that network marketing is attractive because young people do not need to go to an office, nor do they need to be hired. Moreover, Abu Youssef said, with relatively low capital, compared to any other investment, these youth are in business and their success depends on their ability to sell their products. Abu Youssef believes that the negative perception which some people may have of network marketing can be attributed to the fact that the reputation of some multilevel companies which started similar businesses some years ago is poor, given that they failed to achieve the success they had promised. In order to make an informed decision on whether or not to join any of these companies, the professor recommends checking the company's history, taking into consideration how long it has been in business, as well as the quality of the products on sale. "Network marketing companies that do not survive more than four years are usually a failure," she said. Still, despite the growing number of people who have joined these businesses, many more remain on the sidelines. Among the many suspicions that surround network marketing in Egypt is the belief that it requires much-needed hard currency to purchase products. But Diab argues that profit is also made in hard currency. Moreover, he said, on the long run, the company can have some of the products that its sells globally produced locally in Egypt. Indeed, Egypt has already become one of the tourist destinations for which holiday packages are made available. Abu Youssef agreed, adding that the profits gained from this kind of business are spent in the country. She also pointed out that this business should induce local manufacturers to improve their products not only so their products can be marketed by the network, but also because they may otherwise lose their customers. Others question is whether a network marketing business plan is compliant with Islamic Sharia. Others worry that they may become victims of a scam, because it is not so easy to get rich as these companies claim. Merchant acknowledges such fears, adding that abuses by some direct selling companies have indeed taken place in the past, but that one should bear in mind that not all are necessarily faulty. Network marketing promoters also say that the greater good of the business lies in empowering people to do good for others. According to Nihal El-Masri, "When I have money, I can help others by donating to social projects and helping the needy, while I might use some of the money to start a business of my own." The World Federation of Direct Selling Associations (WFDSA) reports that its 59 regional member associations accounted for more than $114 billion in retail sales in 2007, thanks to the activity of more than 62 million independent representatives.
