International Expansion Opportunities For Multi-Level Marketing Via Personal Networks: An Ethnographic Study From Colombia

Abstract

Although multi-level marketing (MLM) and direct sales companies have risen controversies and ethical concerns in recent years, MLM has rapidly expanded to developing and emerging markets in the last decades. Companies like Yanbal, Amway and Oriflame, are some of the multinationals that have internationalized in the Latin America and the Caribbean. Through a grounded theory approach, and using Colombia as a sample of a Latin American country, the internationalization of these companies was analyzed. A vast amount of the data collection for this study was gathered through an ethnographic immersion, and through participant observation, the activities and recruiting practices of these firms was analyzed to determine if they provided international income opportunities in the bottom of the pyramid (BOP) markets. The ethnographic research found that several multi-level and direct sales companies provide international income opportunities, but do not contribute to the increase of formal jobs creation. The results of this study contribute to the existing literature on multi-level marketing and direct retailing firms and the study provides insights about the internationalization of the MLM companies operating in countries with a predominant population at the BOP through personal networks.