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| Sarmistha Neogy / Mumbai May 20, 2011, 14:07 IST |
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Multi-level marketing (MLM) companies have proliferated across the country for quite some time. The temptation to earn easy money is irresistible, given the fact that you can make money by introducing more members. With increasing internet penetration, a lot of MLM companies have gone online. Speak Asia (speakasiaonline.com) is one such firm which is in the news lately for all the wrong reasons.
What is Speak Asia?
It is an online survey company based in Singapore and operating out of Mumbai. It came to India in 2010 and since then its membership has leaped dramatically in such a short span.
How does it work?
You can become a Speak Asia panelist by paying a fee. Once you become a panelist, Speak Asia will e-mail online surveys to you. The first eight weeks are considered to be the training period and the company provides feedback on incorrectly filled forms. After the eight week, Speak Asia starts paying its panelists for completed surveys. Each survey takes around 40 minutes to complete.
Speak Asia has two subscription plans.
1) Standard: You can register as a “Standard” panelist by paying a one-time fee of approximately Rs 5,500 ($120), which provides you subscription to 26 weekly issues of its Online Surveys Today E-bulletin. Here, you respond to two surveys every week and get paid about $10 (Rs 450) a week for six months. Sounds like a good way to double your money in six months.
2) Premium: You can join this plan by paying a one-time annual fee of about Rs 10,000 ($220) and you are eligible to respond to two surveys a week for a year. Again, each completed survey pays you $20 (Rs 900). Since this plan is valid for a year, in three months, the initial capital can be recovered and after that every survey you answer is profit.
This is called “active” income. Refer up to nine friends (the MLM part) and you can get paid for every survey they fill. This is called “passive” income. Plus, there is a concept of team bonus that can make you richer. For every standard panelist you have introduced can earn you $1 every week, while each premium panelist can earn you $3 every week.
What is the mode of payment?
You can become a Speak Asia panelist using your credit card or debit card or a cheque to any of its franchisees.
Speak Asia Online makes the payment in local currency through direct bank transfers. One needs to pay bank transfer charges of 3%. The money is transferred one month after the panelist fills the survey.
What is the eligibility criteria required to be a Speak Asia panelist?
For doing this job, one requires a minimum knowledge of English and internet.
What are the allegations against the company?
- Speak Asia sounds too good to be true and investor associations have alerted investors and the government has announced a probe.
- Investors Grievances Forum has said Speak Asia’s intention is to loot and defraud small, unsuspecting investors. It also asked how a company can pay four times the amount to anyone in one year.
- Critics are calling it a Ponzi scheme, a racket in which the company pays money to older panelists through payments received from newer panelists, and not from any profit earned by the company
- No legal documents have been provided by the company as a proof for their authenticity.
- Speak Asia is not registered in India and according to a report, this company has changed its name three times in the last five years and is blacklisted for non-compliance in Singapore.
- The names of the clients are not disclosed. It also doesn’t provide names of its top management nor address or any contact details of its offices across the region.
What was the outcome of the press conference which took place in Mumbai?
Speak Asia officials held a press conference on May 16 in Mumbai where the company tried to come out clear of the allegations charged against them. Many questions were avoided or answered in “Yes” or “No”. The officials refused to reveal any details of its clients unless the journalists signed a non-disclosure agreement with them. Meanwhile, Speak Asia officials apologised for mentioning the names of ICICI Bank, Bata, Nestle and Bharti Airtel as their clients.
Speak Asia is also setting up a permanent establishment in India from August and five offices across the country by the end of 2011.
How did Speak Asia become popular?
Speak Asia became popular through media advertising as well as word-of-mouth campaign by its existing panelists trying to enroll more members. It had also published advertisements in leading dailies and also run ad films on TV channels during the IPL matches. According to reports, the company has spent $9 million on advertising, training, PR activities and brand building. Speak Asia has 1.9 million panelists across India, which is a large number.
According to Alexa.com, which ranks websites, speakasiaonline.com was the 49th most popular Indian website and it was ranked 1,192 globally. Speak Asia also has an active group on the social networking site Facebook.com, where the members have jointly voiced their opinion in favour of Speak Asia and have hammered the media for spreading rumours and for the negative publicity.
How much money has it made and how much has it paid panelists?
Speak Asia has clocked a revenue of $80.5 million in the last three quarters, and has paid back $52 million to its panelists. But it has earned $60 million from subscription sales suggesting that there is a direct link between the two. It made $18 million from marketing services through its database. The company also claims to have paid Rs 68 crore as service tax.
Last words
The Ministry of Corporate Affairs, Sebi and RBI will look into the various aspects of the operations of Speak Asia. There are no legal provisions in India to curb MLM schemes so companies in this business can flourish.
In any MLM organisation, the risk a participant faces is when he joined the chain. If the company folds up, people who have joined most recently get affected the most, and can lose a part of their investment. Also, the number of impacted people at the last level in a MLM outfit is the largest.
As it is said there are no free lunches in this world, so one needs to be cautious about any company making unrealistic claims. After all what we will lose in the end is our hard earned money.
