Is it ethical for influencers to advertise for MLM?

TL;DR – Then again, what is an honest review? 

As seen on Singapore’s very own blogging queen’s Wendy Cheng otherwise known as Xiaxue’s Instagram story recently,

“Do you think it’s wrong for influencers to advertise for an MLM product and not tell their audience it’s MLM (therefore they get a commission with every sale and also a cut from sales of everyone they recruit under them), since they claim their reviews are all just “honest” reviews?

Based solely on her fans’ responses,  it appears that 79% of them feel that it is wrong.

She continued to make her point with the next few stories which will disappear after 24 hours but to quote the queen herself on a post she made not too long ago,

“Don’t worry, the Internet remembers. Here are the screenshots.”

If you are too lazy to read the wall of text in the screenshots, you may skip them for a quick summary below.

To cut the long story short,

  • Many influencers have started promoting products for brands such as Wowo and SQ masks and labeling them as honest opinions.
  • According to Xiaxue, these so-called honest opinion are nothing more than influencers selling products using a tier scheme which is somewhat similar to a MLM scheme. Multi-level marketing, by the way, is illegal in Singapore, hence there is such a variation to work around the laws in Singapore.
  • Her point is, even if it’s the truth that the product is amazingly good, consumers deserve to know they are being advertised to.
  • She also quoted the Singapore Code of Advertising Practice just in case people don’t know what it’s about.
  • So how does this Wowo thing work? Instead of allowing you to earn money off your “underlinks” the traditional MLM way, you get to purchase the products at a cheaper cost price if you are a higher-tier distributor. In order to reach higher tiers, all you need to do is to sell more products or even sell it to other resellers who will also earn by selling the products.
  • So to speak you sell to both consumers and others who are interested in reselling to earn some cash.
  • She also shared someone’s else story about her finding out that the ingredients aren’t what they claimed to be. Here’s the link.
  • She also explained that she isn’t doing this to attack an ex-friend but she just feels that she needs to about share this with her followers cause, integrity.

Ever since this expose of sorts has gone live, many influencers (mainly those involved in this sales scheme) have responded on their own IG stories. Some explaining how it works, some talking about how much they really love the products, and also to clarify why they feel that it’s not unethical.

For example,

So what are your thoughts on this? Is this a MLM scheme? Is it unethical? Or is it simply just like any other business where you buy low and sell high? Every business has their own bottom line and markup, does this mean that they need to tell everyone their cost simply because they are social media influencers? Or is it a case that these influencers are “abusing” their influence so as to make some quick bucks?

What are your thoughts as an Instagram user and/or consumer?
 



Author: Smith Leong

I'm a self-made thousandaire with a thing for tatts and a loud mouth you probably don't care about. Also blogs at www.smithankyou.com


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