Despite Economic Downturn, 'Dadan-gye' Slightly Rises to 121 in Q4

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Despite the economic downturn, the number of newly entered multi-level marketing (MLM) companies in the market was found to be greater than the number of companies that closed down.

According to the "2024 Q4 Major Government Change Disclosure of Multi-Level Marketing Sellers" released by the Korea Fair Trade Commission (KFTC) on the 31st, the total number of registered MLM companies as of the end of December last year was 121, an increase of 2 companies compared to the previous quarter (119 companies).

During this period, 6 companies newly registered and entered the MLM market, while 4 companies closed down. Newly registered companies include Insan Healthcare, Celeb Korea, NGN, Hadams, Meta Well Korea, and Liman Korea. Companies that closed down include Ecofren, CN Communication, Brain Group, and B&Hive.

Despite the recent economic downturn and weakened consumer sentiment, major direct selling companies such as Liman Korea, which sells Incelderm, expanded their operations and newly entered the MLM market.

Regarding the net increase in the number of MLM companies, a KFTC official explained, "Economic conditions are not a major variable affecting the increase or decrease in the number of MLM companies."

Under current law, MLM sellers are required to enter into indemnity contracts with mutual aid associations or consumer damage compensation insurance contracts such as debt payment guarantee contracts with banks or insurance companies to compensate consumers for damages.

The KFTC discloses major information changes of MLM sellers every quarter to prevent consumer damage caused by MLM sales.

A KFTC official stated, "MLM sellers whose consumer damage compensation insurance has been canceled cannot operate normally, so special caution is required for such companies."

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