China News Service, Beijing, November 4th (Zhong Xingzhen) "Do you want to get rich?" "Give me a few minutes and let's talk. Do you want to know about a business that may make you one million in three years?"
This was the content of a “Thousand People Product Briefing Meeting” held in Xi’an in October this year. This kind of rhetoric that attracts consumers with the prospect of getting rich is not unique to this conference.
Since March 2026, reporters from the China News Network's "People's Livelihood Investigation Bureau" have successively joined the product marketing agent groups of multiple brands such as Oriental Medicine Forest, Pumei Duolhas, and Dawei Tianxia as consumers. As of press time, I have joined more than 10 WeChat group chats and attended more than 20 Tencent meetings.
The reporter found that among the marketers of licensed direct selling companies such as Dongfang Yaolin Pharmaceutical Co., Ltd. and Pumei Duo LOHAS (China) Co., Ltd., in addition to conventional direct sales, there is also a similar systematic model: you can be an agent when you purchase, you can get commissions when developing downlines, and the more levels you have, the higher the income. Although Shaanxi Jinjuehai Trading Co., Ltd., a distribution company for "Dawei Tianxia" related products, has not obtained a direct sales license, the operation methods of its marketers are highly similar to those of the above-mentioned licensed companies.
How does this marketing system of “the more levels, the higher the profits” work? Why are so many people flocking to it? In this regard, reporters from China News Network's "People's Livelihood Investigation Bureau" conducted an investigation.
Daily password update "webinar"
Chen Ke from Zhangzhou, Fujian Province has been worried about his father recently. In May of this year, my father was introduced by the owner of the community to try Dawei Tianxia’s herbal antibacterial cream for free, and was subsequently included in the promotion group.
"My father often attends Tencent meetings held by Dawei Tianxia. Each meeting lasts about an hour, and most of the participants are middle-aged and elderly people." Chen Ke told reporters that the team has long organized members to attend classes at Tencent meetings and also promotes that the "Xiaozihao" product it sells can remove glasses for myopia and improve dry eye syndrome, cataracts and other eye diseases.
The reporter noticed that not only Dawei Tianxia, but also brands such as Dongfang Yaolin and Pumeidao LOHAS have related online meetings, and some meetings have even more than a thousand people online.
"Protecting eyes is a pain point, protecting eyes is protecting the country." "Simple, obedient, copy and follow, and you will succeed!" "A pig comes in and turns into ham when it goes out." Although the brands are different, the contents of these meetings are similar.
In internal meetings for agents and potential customers, they called each other family members and teachers, emphasized "gratitude", "great love", "persistence will lead to success", etc., and shared the effects of product use or entrepreneurial experiences. Most of these meetings are named "webinar". Some brands, such as Oriental Medicine Forest, will update their passwords every day and set up a review session after the morning meeting. In some public meetings, the content is mainly health science popularization that is relatively compliant.
Encrypted meetings and review meetings within the Oriental Medicine Forest Marketing Group.
Chen Ke revealed that in addition to online meetings, in May this year, marketing staff also sent her an invitation to an offline event called the "Thousand People Product Briefing Session", and each person had to pay a venue fee of 299 yuan. The reporter observed in the group chat that from October 13th to 15th, Dawei Tianxia once again held a "product briefing meeting for thousands of people" in Xi'an. This time, each person was charged a venue fee of 999 yuan and claimed to subsidize "10 boxes of products worth 3,000 yuan."
This is not an isolated case. In March this year, Su Xin's mother went to Changchun to participate in offline activities at the invitation of Pumei Duo LOHAS marketing staff. "The event fee is exactly the price of a box of products, 399 yuan, and you will receive a box of products of the same price as a gift after participating." Su Xin said that the event lasted for about one day, and the content mainly focused on product descriptions, sharing of successful cases, etc. The reporter observed that the Oriental Medicine Forest has held similar activities many times.
The reporter inquired on the unified platform of the Ministry of Commerce’s business system and found that Pumeidao LOHAS (China) Co., Ltd. and Dongfang Yaolin Pharmaceutical Co., Ltd. are direct selling companies. As of October 20, there were 2 and 5 registered direct selling trainers respectively.
"Direct selling is a distribution method in which direct selling companies recruit direct sellers, who sell products directly to final consumers outside of fixed business premises." Xia Ying, a lawyer at Beijing Zhongwen Law Firm, pointed out that the above training system is essentially different from formal direct selling training and does not fall into the category of compliant direct selling.
She said that according to the "Direct Selling Management Regulations" and the "Direct Seller Business Training Management Measures", formal direct selling training can only be organized by direct selling enterprises and taught by personnel who have obtained direct selling trainer certificates and have been registered with the Ministry of Commerce. The training content should be based on laws and regulations, business knowledge, and professional ethics, and must not contain deceptive or misleading content. At the same time, the training is free and open.
Unlike Oriental Medicine Forest and Pumei Duolhuo, Shaanxi Jinjuehai Trading Co., Ltd., the relevant distribution company of Damu Tianxia® Herbal Antibacterial Cream, and Shaanxi Chumei Health Industry Co., Ltd., the production company, have not obtained direct sales licenses. However, the operation of its marketing system is similar to that of the aforementioned licensed companies.
Earn one million in three years? The temptation of hierarchical fission
"In our core group, some people did nothing for a day and received 2,500 yuan in their account." Zhang Yun is a senior manager of the product "Pharma Life Herbal Extract Moisturizing Eye Essence" distributed by Pummel Dolohas. She told reporters that many people in the team have made considerable profits through agency products.
The atmosphere for entrepreneurial success is everywhere. The reporter observed in the marketing agent group of multiple brands that almost every time a product is sold, the group will announce the good news and give a thumbs up. These products generally implement the purchase-and-agent model, which means that after purchasing a product, you can sell the product to others, and you can even develop offline and form your own sales team.
Screenshots of agency advertisements and likes in the marketing agency group.
Driven by the atmosphere, Chen Ke's father had the idea of "doing a career." Chen Ke told reporters that a word his father often talked about was "fission" - development offline, and he planned to invest 15,000 yuan to buy 100 boxes of products to join the franchise. "My father believes that this is a once-in-a-lifetime opportunity to make money, and he must seize it quickly. He even wants to develop us into his downline."
On the other hand, Wang Lan, who is in her 60s, is now a senior dealer in the "Optodynamics" section of Oriental Medicine Forest. She is only about 400 boxes away from the threshold of purchasing 3,000 boxes of products for a special dealer. She told reporters that by purchasing a box of products, you can become a special dealer and have the "right to share" the products without signing any contract. The so-called sharing means selling products. Wang Lan introduced: "You or your downline will make a profit if you sell it. If a junior dealer shares a box, the backend will receive 140 yuan in seconds, and an intermediate dealer will receive 180 yuan in seconds if he shares a box."
She emphasized that the higher the level, the higher the benefits. The performance of the platform will never be cleared. The more you use it, the more money you will save. Sharing will be credited to your account in seconds, without the need for large investments. "This is like trying to pry the earth with a toothpick. As long as you persist, you will get results."
The reporter contacted companies such as Oriental Yaolin Pharmaceutical Co., Ltd. and Pumei Duo LOHAS (China) Co., Ltd. through public contact information many times on issues such as product sales models, remuneration forms, and business training. As of press time, none of the above-mentioned companies had responded to interview questions.
It is worth noting that Shaanxi Jinjuehai Trading Co., Ltd., the distribution company of Damu Tianxia® Herbal Antibacterial Cream, is a small and micro enterprise established in May this year with a registered capital of 100,000 yuan. There is currently no public contact information. The reporter sent an interview letter to his industrial and commercial registration address on October 19, but as of press time, he had not received a response. Previously, the distributor of the antibacterial cream was Shaanxi Tianyida Trading Co., Ltd., and the company was canceled in June this year.
“Binding agency qualifications by purchasing goods is essentially setting an entry fee in disguise.” Dong Yiren, executive deputy director of the Social Commerce Research Center of Nanjing University, pointed out that the reason why this model has been repeatedly banned and even intensified is that the interests of the three parties of enterprises, agents, and participants are highly consistent. At the same time, the objective difficulties of supervision are superimposed, forming a vicious circle of “fighting but not dying, and dying again”.
He further analyzed that for enterprises, this model does not require the establishment of complex offline channels or the need to invest in high-end brand marketing. It only relies on a set of hierarchical remuneration rules to allow agents to spontaneously fission and reduce customer acquisition costs. For agents, this model gives ordinary people the prospect of getting rich by "starting a business with a low threshold and earning commissions from offline sales." Many people even do not use the products themselves and earn commissions purely by attracting new customers. For consumers, a small amount of investment can be exchanged for entrepreneurial opportunities, and it is easy to be attracted by high-yield gimmicks.
Xia Ying also emphasized that the core of this type of model is no longer selling goods, but rather "pulling people's heads." Statutory direct selling is a single-level remuneration, while multi-level agency and hierarchical remuneration are typical multi-level team remuneration, and there is a risk of hitting the red line of the "Prohibition of Pyramid Selling Regulations".
Behind the difficulty of making complaints, private domain marketing brings five major difficulties to supervision
In the face of these marketing chaos, supervision and evidence collection is not easy.
Chen Ke understands this deeply. In May of this year, based on the relevant information on the product packaging, she complained to Shaanxi Chumei Health Industry Co., Ltd., the manufacturer of Damu Tianxia® Herbal Antibacterial Cream, through 12315 to the Economic and Technological Development Branch of Xi’an Market Supervision and Administration Bureau of Shaanxi Province, hoping to “investigate and deal with the false propaganda of this product to prevent more people from being deceived.”
However, the complaint was not entertained. The response given to her by the relevant departments was: After verification, Shaanxi Chumei Health Industry Co., Ltd. did not produce the product "Dawei Tianxia® Herbal Antibacterial Cream"; it was recommended to complain and report to the market supervision and management department or the public security department at the place where the incident occurred.
However, a marketing agent from Damu Tianxia told reporters that the distributor of the antibacterial cream is Shaanxi Jinjuehai Trading Co., Ltd. and the manufacturer is Shaanxi Chumei Health Industry Co., Ltd. The authorization letter he provided showed that Shaanxi Chumei Health Industry Co., Ltd. authorized Jin Juehai to sell the Dawei Tianxia® herbal antibacterial cream produced by his company nationwide, and was responsible for handling the sales, publicity and after-sales service related matters of this product.
The reporter called the public contact information of Shaanxi Chumei Health Industry Co., Ltd. regarding this matter. The other party stated that the product was indeed produced by the company, and "production has been temporarily suspended" recently. As a manufacturer, the company can only ensure that the antibacterial rate of the product meets the standards. As for the use of disinfectant products on the eyes and the promotional content of marketers, the other party said it could not answer directly.
Why did the regulatory authorities say that the company was not producing? On October 26, the Economic Development Zone Branch of the Xi'an Municipal Market Supervision Administration responded to a reporter from the People's Livelihood Investigation Bureau that after receiving consumer complaints, the unit staff conducted on-site verification of Shaanxi Chumei Health Industry Co., Ltd. During the verification period, "Dawei Tianxia Antibacterial Cream" was not found in the company's production line and warehouse, and responded to consumer complaints based on this.
However, during subsequent further verification of the company's production status, the regulatory authorities found that it produced a total of 6 batches of "Dawei Tianxia Antibacterial Cream" from January to June 2026, and that Shaanxi Fujingdao Trading Co., Ltd. and Shaanxi Jinjuehai Trading Co., Ltd. were responsible for sales.
This is just a microcosm of the difficulty of supervision.
"The closed nature, concealment and cross-regional nature of private domain marketing have brought five major difficulties to supervision: difficulty in finding clues, difficulty in fixing evidence, difficulty in chain tracing, difficulty in jurisdictional disputes, and difficulty in legal characterization." Xia Ying pointed out that a large number of scattered private community and private live broadcast rooms form an "information cocoon", making it difficult for external regulatory forces to penetrate. Many cases can only be discovered through reports from victims, and the proportion of active discovery is very low.
She analyzed that this type of model usually operates across regions, with participants spread across the country, and the jurisdiction of relevant departments is limited to the local area. It is easy to create a situation where "what you can see cannot be controlled, and what you can manage cannot be seen." If the victim complains to the local regulatory authority, it may be difficult to file the case because the subject is out of town.
Dong Yiren also said that the violation model breaks through the traditional regulatory system of localization and industry type. There are barriers to law enforcement authority and data sharing between market supervision, network information, public security, and platform parties. It is not easy to form a coordinated crackdown across the entire chain. "There is a big controversy in judicial practice about how to define whether the illegal content released by a personal account is an official behavior authorized by the company or an independent behavior of an individual. At the same time, how to distinguish the hierarchical remuneration and head-pulling behaviors in the private domain from the legal dealer channel management and team incentives, the regulations do not provide clear practical boundaries."
He further pointed out that the current "Advertising Law of the People's Republic of China", "Direct Selling Management Regulations", "Prohibition of MLM Regulations" and other regulations are mainly formulated for traditional offline operations and public domain advertising scenarios. There is still a lack of clear enforcement details and identification standards for violations in emerging scenarios such as private communities, friend circles, online meetings, and one-to-one private messages.
Relevant systems are being revised. In May 2026, the State Administration for Market Regulation promulgated the "Regulations on the Prohibition of Pyramid Selling (Revised Draft for Comments)" to solicit opinions from the public. The revised draft clarifies the definition of "online pyramid schemes", adds Internet information, communications, the People's Bank of China, financial supervision and other departments as relevant departments to combat pyramid schemes, adds new monitoring measures for funds involved in pyramid schemes, introduces credit penalties, and changes fines from fixed-amount fines to multiples of illegal gains.
"Future industry development must re-establish product-based, compliance-based, and consumer-centered values." Dong Yiren said that only by working together from multiple dimensions such as regulatory supervision, enterprises, industries, and the public can we get out of the current predicament and achieve high-quality and sustainable development. (Chen Ke, Su Xin, Wang Lan and Zhang Yun are pseudonyms in the article) (End)
