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Who Wouldn’t Want to Be a Millionaire? Multi-Level Marketing in Bali

By: Bodrek Arsana

This article was originally published in Latitudes magazine, a renowned bi-monthly magazine focusing on Indonesian culture. The magazine hailing from the island of Bali previously existed in paper form and was especially known for its in-depth critical articles and beautiful photography. As a tribute to all contributors of this magazine presents a selection of articles published in the years 2001-2004.

40-year-old Dewa Made Oka, known to his friends as Genjing, is a famous figure in the village of Tampaksiring, Bali, twenty kilometers to the north of Ubud. At almost every ritual in the area, be it a cremation, a wedding, a birth ceremony or a temple anniversary, he’s bound to be there. His diligent ritual attendance is not, however, a sign of especially intense religiosity. It has more to do with his belief in the goddess of luck. For wherever Genjing goes, he carries a faded bag containing a pair of dice and a plastic betting mat, ready to entertain the crowds with a bit of post-ceremonial gambling.

But a few months ago, Genjing started coming to rituals offering a different kind of chance. His long hair lopped off, his wrinkled shirt neatly ironed, and his trademark bag exchanged for a briefcase, Genjing began to enthuse about a sure-fire way to get rich quick called GoldQuest. The idea, he explained, was simple: buy one gold coin for US$860. Recruit two other people to buy gold coins. Help them recruit two people each to buy gold coins. Once you have ten people below you in the pyramid, start collecting 40% commission on the purchases made by people that they recruit. Then sit back and wait for your life to change.

Multi-level marketing schemes like GoldQuest began sweeping Indonesia in the early 1990s. Most of them required little capital and no prior experience or education, making them highly attractive to the country’s marginally employed. Housewives, university students, underpaid civil servants and the out of work signed up in droves to become distributors for companies like Amway, Sun Hope, Stockist and Forever Young. Most of these companies operated on the same pyramid principle, requiring participants to first invest in a ‘starter kit’ of products and pay to attend a series of ‘motivational’ seminars. Although these companies sold products, salespeople were generally inspired less by the commissions they could receive on their own sales than by the prospect of exponential riches by recruiting new salespeople. The participants one recruited, called one’s ‘downline’ in multi-level marketing lingo, would then sell products and recruit even more participants, accruing commission not only to themselves but to their ‘upline.’

Amway, which set up shop in Indonesia in 1992, claims to be the largest ‘direct selling’ company in the country, with over 70,000 local ‘distributors.’ In 2000, PT Amway Indonesia booked a profit of Rp150 billion (US$1.5 million) selling from a catalogue of over 250 products, mostly soaps, household cleaners and cosmetics. When Amway first began operating in Indonesia, thousands of people would pack into hotel ballrooms to hear how they could rocket their way out of poverty by selling perfume and detergent and recruiting their friends and families into ‘system networks’ of Amway ‘distributors.’ In an era of corruption, cronyism, financial hardship and government oppression, Amway’s message, advertised on its web site, was highly appealing: ‘a business opportunity to those looking for an alternative that does not depend on ethnicity, sex, education level, age or even experience.’ Not only did Amway, a U.S.-based company that claims to have 2.5 million distributors worldwide, sound modern and democratic, its structure felt comfortable to those brought up in a hierarchical society. ‘Uplines’ and ‘downlines’ seemed familiar to most Indonesians, and even the concept of paying money up front for the promise of greater rewards later resonated with the traditional arisan, a small-scale credit group that rotates withdrawals according to lottery.

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