The 2023 financial report of Herbalife Ltd. shows that in 2023, net revenue from the Vietnamese market reached $279 million (equivalent to over 6.8 trillion VND), a decrease of $19.9 million or 6.7% compared to 2022. In local currency, net revenue decreased by 4.9%. According to the company, exchange rate fluctuations had an adverse impact of $5.2 million on net revenue. Sales volume in Vietnam also decreased in 2023 compared to 2022.
Herbalife believes that the macroeconomic conditions in the Vietnamese market continue to pose challenges. In addition, changes in multilevel marketing regulations in Vietnam were approved by the Vietnamese Government in April 2023; Herbalife stated that it is continuing to closely collaborate with the Vietnamese Government and monitor these regulations as well as any impact they may have on the company’s business operations in Vietnam.
Despite the decrease in net revenue, Vietnam remains the third largest market for Herbalife in Asia-Pacific in 2023, behind India with a net revenue of $796.6 million (a 17.6% increase compared to the same period last year) and China with $327.4 million (a 16.3% decrease).
In Vietnam, Herbalife Vietnam Company Limited was established in 2009, operating under the multi-level marketing model. Vietnam is the 71st market for Herbalife worldwide. Currently, Herbalife Vietnam has its headquarters in Ho Chi Minh City, branches in Hanoi, Danang, and representative offices and distribution centers in Binh Duong province, Phu Tho province, Nghe An province, Hai Phong City, and Can Tho City.
In terms of revenue, this is the largest multi-level marketing company in Vietnam, surpassing the revenue of New Image, Amway, Oriflame, etc. The weight management and sports nutrition products under the Herbalife brand are well-known to those with needs, bringing in billions in revenue annually.
Herbalife Vietnam’s revenue has been continuously growing each year from 2015 to 2022. According to Vietdata, in 2022, the company recorded revenue of around 7.5 trillion VND, an 11% increase compared to 2021. However, its profit decreased by 78% to just over 70 billion VND.
According to Vietdata, in 2021, the revenue of the multi-level marketing industry in Vietnam exceeded 19 trillion VND (about $772 million), an increase of 24% compared to 2020 and over 50% compared to 2019. It is worth noting that for 5 consecutive years, the multi-level marketing industry has not only maintained stability but also witnessed impressive growth with a high growth rate.
The reason is that Vietnam is currently an ideal business environment for multi-level marketing, with a population of nearly 100 million people, continuously improving living standards and income levels, especially the middle class. This creates many opportunities for multi-level marketing.
Companies involved in this sector also enjoy many benefits such as legal recognition, no requirement for large investments, no need for physical stores, no sales pressure, no time constraints, and easy participation regardless of educational level and place of residence.
Vietnam was ranked in the top 5 global markets with the fastest growth rate in multi-level marketing in 2019. The number of people participating in multi-level marketing ranks 5th in Southeast Asia, after Indonesia, Thailand, the Philippines, and Malaysia.
However, at present, some multi-level marketing companies do not fully comply with legal regulations, which has prompted the government to take stronger actions in tightening the management of multi-level marketing activities and imposing severe penalties on companies violating the law.
According to statistics from the National Competition and Consumer Protection Authority, there are currently 20 legal multi-level marketing companies operating in Vietnam. In 2022, 2 companies ceased their multi-level marketing activities, including Siberian Health International LLC and Homeway Vietnam Company Limited. Both companies had their multi-level marketing certificates revoked due to serious violations of legal regulations.
In addition, in 2022, the Competition and Consumer Protection Authority conducted sector-specific inspections on compliance with the law in multi-level marketing for another 5 companies. The results showed that these companies were basically in compliance with the legal regulations on multi-level marketing activities, although there were still some existing issues and limitations.
