"工欲善其事,必先利其器" (To do good work, one must first sharpen one's tools). The pie from the sky falls to those who are prepared; those who are not prepared only receive a trap. Only by doing conscientious business, selling good products, not faking transactions or income, and letting your brand bring due value to every customer, and only if your products are safe and reliable, can you become the trump card for the long-term development of the micro-business industry. God wants to destroy you, He first makes you crazy. The so-called "largest micro-business" in China, Moneng International, which claimed annual collections of 10 billion yuan, has collapsed, suspected of defrauding 10 billion yuan, with 100,000 agents nationwide facing total loss and beginning to besiege its headquarters. Recently, this news has spread like wildfire, flooding major media screens. What kind of company is Moneng International behind this? Since its establishment in 2015, Moneng International used a "hierarchical agency" model to hold meetings across the country, brainwashing and luring hundreds of thousands of micro-business novices to join. The amounts defrauded ranged from tens of thousands to hundreds of thousands of yuan, with some micro-business traders even facing family ruin. Under media exposure, one of Moneng International's founders, Jiang Decai, was brought to light: starting from grassroots entrepreneurship, he made 2 billion yuan in health product sales and TV shopping. He then ventured into mobile phones and micro-business. Many people may not know that the once-hyped but failed star brands "Nici" and "Dakele Mobile" also came from this group. When one door closes, another opens. He was unsuccessful in mobile phones but flourished in the micro-business circle. However, this time he went too far. The collapse of Moneng International is destined to be met with ruthless condemnation and complete abandonment by the market. ● ● ● Moving to Micro-Business: From 0 to 10 Billion On the evening of March 8, 2016, Ding Xiuhong, founder of Dakele, announced on Weibo the suspension of Dakele mobile phone business. Thus, the once-ambitious Dakele phone declared failure. **▲**The Death of Dakele Mobile As "grassroots entrepreneurs" in the mobile phone industry, Dakele and another grassroots representative, Nici Mobile, had a deep connection: they shared a common investor, Jiang Decai. In 1998, Sichuan native Jiang Decai started his business selling health products. Before founding Moneng International, he was engaged in health product sales and TV shopping, earning 2 billion yuan. He also engaged in no-store mobile phone sales. Lu Hongbo, the controller of Nici, and Jiang Decai were friends of 20 years. Although both had accumulated considerable networks and funds, they did not want to rest on their laurels. **▲**Moneng International Chairman Jiang Decai In 2010, the smartphone market was just entering a red ocean. The explosive launch of the iPhone 4 directly stimulated the nerves of the two. They hit it off and decided to enter the mobile phone industry, and Nici was born. Subsequently, Nici phones, with their Apple-like appearance and ultra-low prices, became popular in China's second-, third-, and fourth-tier cities. But the price of around 399 yuan brought "knockoff quality" and virtually non-existent "after-sales service." In 2013, media successively exposed that more than half of Nici phone stores had closed. After that, Nici disappeared without a trace. Currently, no news about Nici's survival can be found online. On June 27, 2012, Ding Xiuhong left NetEase and launched Dakele Mobile. However, in subsequent financing, Jiang Decai of Moneng International was prominently listed and became a supervisor of Dakele. In December 2014, Dakele 3 initiated a crowdfunding model for mobile phones, raising 16 million yuan in 25 minutes and gaining fame. Unexpectedly, Dakele 3 became Ding Xiuhong's nightmare. According to media reports, after the crowdfunding ended, due to memory supply issues, normal delivery of Dakele 3 was hindered. Subsequently, quality problems were exposed one after another. After that, Dakele Mobile made no further moves, released no new products, and even no spy shots leaked on social networks. Then, there was no more. After the health product industry declined and the mobile phone industry hit a wall, Jiang Decai sought change. "Small strategies look at opponents; big strategies look at market capacity." He repeatedly emphasized this sentence. In 2015, Moneng International entered the micro-business sector. At that time, due to exposure by CCTV, micro-business was at a low point, mired in a trust crisis. It is reported that now the number of national agents of Moneng International has exceeded 1 million, with a total of 4 brands under it. It is the first micro-business enterprise to grow from 0 to 10 billion in market value, and the first to have industrialized independent traffic acquisition. Data shows that Moneng International focuses on women's health and beauty products. It caught the wave of micro-business popularity in the past two years, developing micro-business through a hierarchical agency model, mainly promoting four product series: Bang Nvlang, V-Show, Shui Lingzhu, and Qiao Tianxia. It once claimed annual collections of 10 billion yuan, making it the "largest micro-business" in China, and even called itself a leading enterprise in domestic mobile e-commerce and new micro-business with large scale and complete systems. ● ● ● Good-Person Economy: A Lie That Bursts on Contact Before we tear off the ugly mask of Moneng International, let's first see what tricks it used to succeed. A reporter once asked Jiang Decai: "What is Moneng International's 'moat'? " "Good-person economy. " Jiang Decai's answer seemed confident. He said, "Good products, good models, good services, and good character are indispensable. Only in this way can we grow stronger in the mobile internet era. We have established a healthy, sustainable, and standardized new micro-business model, cooperated with international enterprises to create high-quality products, and built a strong service team. We firmly believe that talent is the most important business model. Moneng's success is actually the victory of the 'good-person economy': good products, good models, good services, and good character. It is also a miracle created by this era, the mobile internet era where 'people are above all.'" However, his self-proclaimed "good-person economy" lie burst on contact when subjected to the market's ruthless selection. Take the two main products, for example: the behavior of Bang Nvlang Antibacterial Gel and Goddess Bubble Antibacterial Liquid is suspected of multiple violations of the law. Bang Nvlang Goddess Bubble was developed by Taiwan Yin Quan Biotechnology Group Co., Ltd., produced by Xi'an Huipu Biotechnology Co., Ltd., and sold by Beijing Bang Nvlang Health Technology Co., Ltd., a subsidiary of Moneng International. In the past two years, authoritative media in Heilongjiang, Sichuan, Guangxi, etc., have reported and exposed Bang Nvlang's false advertising, substandard product quality, and micro-businesses cheating friends. According to inspection reports issued by national quality inspection departments: According to GB 15979-2002 "Hygienic Standard for Disposable Sanitary Products," the two hygiene products, Bang Nvlang Antibacterial Gel and Goddess Bubble Antibacterial Liquid, have no inhibitory effect on Candida albicans, and the product quality is substandard. According to Article 111 of the Contract Law of the People's Republic of China, they can be legally returned. The outer packaging uses non-compliant traditional Chinese characters, and they can be legally returned. Even more exaggerated, Bang Nvlang Antibacterial Gel has no Taiwanese elements, but its advertising claims: "Bang Nvlang is Asia's No.1 female private care brand. Bang Nvlang was born in 2009, created by Taiwan Yin Quan Bioengineering Co., Ltd. and Taiwan Female Private Care Laboratory, based on its core technology to create a new generation of female private care products..." Evidence shows: Taiwan Yin Quan Bioengineering Co., Ltd. is actually a private joint-stock company registered in Hong Kong. Its registered capital is 10,000 Hong Kong dollars. The full name of the company is: Taiwan Yin Quan Health Biotechnology Group Co., Ltd. The sole shareholder and sole director is Wan Dingjin, a villager from Yanpian Group, Jian She Village, Sha Wan Town, Zunyi County, Guizhou Province, mainland China. The group company has no Taiwanese enterprises or natural persons. The company's daily contact is a Hong Kong company: Baililai International Group (Hong Kong) Co., Ltd. The company's address: Room 1501, 181 Queen's Road Central, Sheung Wan, Hong Kong. It is actually the address of Baililai Company. Therefore, this group company is actually a shell company registered in Hong Kong by a mainlander—a "group" company with only one boss, no actual office address, and no employees. Between March 2015 and February 2017, Taiwan Yin Quan Bioengineering Co., Ltd., Beijing Bang Nvlang Health Technology Co., Ltd., and Xi'an Huipu Biotechnology Co., Ltd. violated the relevant provisions of the Advertising Law by creating webpages on the internet and WeChat public accounts to promote their products "Bang Nvlang Antibacterial Gel and Goddess Bubble Antibacterial Liquid." The false advertising phrases include:
(1) Goddess Bubble Brand Red Moisturizing Antibacterial Liquid is purely plant-extracted, containing no drug or chemical ingredients; gynecological gel is an external gynecological drug, used for the treatment of vaginitis, cervicitis, and various gynecological inflammations, mainly including: bacterial vaginitis, trichomonal vaginitis, mixed vaginitis, gonococcal infection, chronic cervicitis, cervical erosion, and other gynecological diseases;
(2) In 2013, "Bang Nvlang" was rated by the Taiwan Female Private Care Products Industry Association as the "2013 Outstanding Brand" and "Top Ten Brands and Innovative Brands of Taiwan Daily Chemical Industry (Private Care Products)";
(3) Taiwan Yin Quan Bioengineering Co., Ltd. is the world's largest production and R&D base for female private care products, and a raw material and technology supplier for well-known first-line international brands of female private care products in China;
(4) Bang Nvlang is Asia's No.1 female private care brand; Goddess Bubble has applied for 4 invention patents. These behaviors are suspected of using advertising to make false publicity about their products and services, misleading the advertising audience, causing significant economic losses, and being serious in nature, suspected of constituting the crime of false advertising. WeChat user "@Terminator" even posted a message on WeChat that, for the interests of Bang Nvlang agents and consumers, he spent one million yuan to hire lawyers to resolutely fight the rights protection battle. In addition, according to "Ken Meizhuang" (a beauty industry media), multiple micro-business agents told reporters that Moneng International held summits across the country, locking hundreds of people in a closed environment for "brainwashing training," which is no different from "pyramid schemes." First, they tell everyone that the era of mobile internet has come, and physical stores and factories will definitely go bankrupt, so they must seize the opportunity of mobile internet. Then they introduce "successful experiences," who made how much money by joining Moneng, and who took loans to do micro-business and achieved a counterattack. "Those who went up to introduce successful experiences and scrambled to pay were actually arranged shills, just to make the novices pay quickly, exactly like the old pyramid scheme routines," revealed a higher-level Moneng micro-business agent. "Bang Nvlang is playing a game of hot potato. As long as you fool the next person to take over, the money in hand is truly earned. If no agent takes over, the goods can only be stuck in hand. Such products themselves have a small market." It is reported that Moneng International's Bang Nvlang has a total of 7 levels. The highest level, "Official," requires a payment of 6 million yuan; below are "Big Core" at 1.32 million yuan, "Small Core" at 222,000 yuan, "General Agent" at 37,800 yuan, "Level 1" at 8,250 yuan, "Level 2" at 3,250 yuan, and "Angel" at 640 yuan. Each level has different purchase prices. To obtain a larger price difference, one must continuously upgrade. This is also suspected of constituting the crime of organizing and leading pyramid scheme activities. **▲**A micro-business payment record (source: Ken Meizhuang) ● ● ● ****Demonization? The Pyramid Scheme Shadow of "Micro-Business" What is a pyramid scheme? Although there is no clear legal definition in China, simply put, any commercial behavior that does not rely on products but on developing downlines as a profit model can be regarded as a pyramid scheme. An important sign of whether a pyramid scheme is established is whether there is a pyramid-shaped personnel structure. Writer Murong Xuecun, in his special report "Murong Xuecun Undercover in Pyramid Scheme for 23 Days," described pyramid scheme training as "a group of people squeezed in a small room, loudly shouting 'I want to get rich, the slogan of scientific wealth creation'" . However, pyramid schemes in micro-business differ from traditional pyramid schemes in that all activities revolve around the internet, and uplines and downlines may never have met. The concealment of micro-business pyramid schemes leaves agents in the scam without any awareness. Compared with traditional pyramid schemes, micro-business pyramid schemes are more moderate and more covert. In Tencent's announcement "On Rectifying Illegal Distribution Model Behaviors," the essence of the pyramid scheme model can be clearly seen from the first case of "distribution model based on downline sales performance commission," while the second case of "inducing users to develop personnel in a rolling manner by promising returns" is much more deceptive. Moneng International Group and its affiliated companies and core members used internet WeChat as a promotion platform, under the guise of selling the two products Bang Nvlang Antibacterial Gel and Goddess Bubble Antibacterial Liquid, requiring agents to purchase a certain quantity of products to obtain the "Bang Nvlang agency qualification." According to the total amount of purchased products and the different order of product prices, seven levels from high to low were set. Moreover, they promised "agents" at various levels dozens of precise customers as gifts, and gave cash rewards of different amounts for introducing different levels and numbers of agents. Through overwhelming false advertising on the internet and TV news media, they lured and coerced the continuous development of the public to purchase products and become so-called "agents." And those who want to do micro-business mostly have a psychology of getting rich quickly. Wanting to get rich quickly and lacking discernment, they are naturally easy to be fooled, quickly joining the micro-marketing army and becoming downlines of others, transforming from ambitious sellers into actual product users. The victors are always the few at the top of the pyramid; more downlines can only serve as cannon fodder for others. To discuss micro-business pyramid schemes, we still need to explore the essence of pyramid schemes. In my view, the definition of pyramid scheme in Article 2 of the "Regulations on Prohibition of Pyramid Schemes" (hereinafter referred to as the "Regulations") is very concise and summary: "It refers to the behavior of organizers or operators developing personnel, calculating and paying remuneration based on the number of personnel directly or indirectly developed by the developed personnel or their sales performance, or requiring the developed personnel to pay a certain fee as a condition for obtaining the qualification to join, thereby seeking illegal benefits, disrupting economic order, and affecting social stability." In layman's terms, as long as it has elements such as "paying an entry fee," "pulling heads," and "forming a hierarchical team with commission," it can be identified as suspected pyramid scheme. Many people think that "empty-handed white wolf" (getting something for nothing) is pyramid scheme, and that selling physical goods is direct selling or marketing. This is actually a wrong understanding. Article 7 of the Regulations stipulates: Organizers or operators who, through developing personnel, require the developed personnel to pay fees or pay fees in disguised form by subscribing to goods, etc., to obtain the qualification to join or develop other personnel to join, and seek illegal benefits, also constitute pyramid scheme behavior. It can be seen that even if there is a subscription of real goods, it does not prevent it from being a disguised form of charging entry fees. In essence, any commercial behavior that does not rely on final consumer consumption but on developing downlines as a source of profit can be regarded as a pyramid scheme. ● ● ● ****In Conclusion: Walking Out of the Siege The current micro-business world is full of impetuosity. People play with concepts, play with thinking, play with pyramid schemes, play with feelings, but they just can't honestly make good products and ensure genuine quality. Therefore, most become famous overnight and then rapidly decline. Those who are good at swimming die in water, those who are good at using knives die by knives, and those who are good at marketing die by marketing! "To do good work, one must first sharpen one's tools." I advise those entrepreneurs trapped in "micro-pyramid schemes": The pie from the sky falls to those who are prepared; those who are not prepared only receive a trap. Only by doing conscientious business, selling good products, not faking transactions or income, and letting your brand bring due value to every customer, and only if your products are safe and reliable, can you become the trump card for the long-term development of the micro-business industry. Appendix: Exposing Moneng International's "Fraud Group" Why can Moneng International stir up trouble in the market? This is due to Jiang Decai and his star-studded "entrepreneurial group." The first figure: Jiang Decai, Chairman of Moneng International. He claims to uphold the corporate spirit of "people-oriented, virtue carries things." He not only achieved remarkable results in TV shopping and communications but also innovated in business models. Under his leadership, the company entered the micro-business field in 2015, creating the new mobile e-commerce model of "new micro-business." The second figure: Wan Bing, President of Moneng International. He claims to have years of experience in market sales management and operations, having served as General Manager of Guizhou Baihua Pharmaceutical Group Guangxi Branch, Market General Manager of Guangzhou Baiyunshan Pharmaceutical Group Chen Liji Pharmaceutical Factory, and Sales Department General Manager of Nici Technology Group. The third figure: Jiang Ruxiang, Chief Strategy Officer of Moneng International. The strategist of Moneng International. He holds a PhD in Social Economics from Peking University; long-term guest of CCTV's "Dialogue" and "Business Masters"; contributing writer for Fortune and Harvard Business Review (US); returned scholar from Columbia Business School; Deputy Director of the Senior Economic Training Center of Guanghua School of Management, Peking University; strategic advisor to Alibaba, TCL, Lenovo Group, and other enterprises. The fourth figure: Dang Shengde, Vice President of Moneng International. From 2003 to 2013, he served as Executive Deputy General Manager at Guangzhou Moneng, responsible for national marketing planning, and was the behind-the-scenes promoter of many hit products, known in the industry as the "King of Traffic." In December 2015, he joined Beijing Moneng International as Vice President, in charge of the group company's marketing planning. The fifth figure: Huang Zishan. Mentor of hundreds of thousands of female micro-entrepreneurs and gold medal lecturer in micro-business. The O2O team she founded is one of the largest teams in China's micro-business circle. She once set a record of 100 million yuan in sales in one day. She is known in the industry as "China's 100 Million Yuan Sister." Source: Kuaidao Sanxia (ID: iyqkpd) -END-