Date
22 August 2017
Tianjin police are reported to have conducted large-scale raids on multi-level marketing operators following the mysterious deaths of two sales people. Photo: Tianjin Public Security Bureau
Tianjin police are reported to have conducted large-scale raids on multi-level marketing operators following the mysterious deaths of two sales people. Photo: Tianjin Public Security Bureau

Tianjin cracks down on MLM operations after death of 2 young men

Tianjin police have launched a crackdown on illegal multi-level marketing (MLM) operations after such activities were blamed for the death of another young man in the city.

Zhang Chao, a graduate student at Shandong University, was found dead last month on the outskirts of Zhangjiawozhen.

According to mainland media, Zhang had joined an MLM operation on July 14.

Zhang reportedly entered a marketing group with a friend named Li Wenxing and died three days later with symptoms of a heatstroke.

He was said to have lain unattended by the roadside before he passed away.

Police are investigating the death and have arrested three people so far in relation to the case.

Meanwhile, Zhang’s friend Li, who too was part of the “Die Bei Lei” MLM group, was also found dead the same day.

According to mainland media, Li traveled to Tianjin after responding to a false job advertisement on a platform called “BOSS jobs”.

Li was found drowned in a pond near a dormitory.

The deaths of Zhang and Li in mysterious circumstances prompted wide coverage in Chinese media and triggered intense discussions on social media forums, with netizens linking the deaths to the MLM operation. 

MLM, also known as pyramid selling, refers to the practice where firms use existing distributors to recruit new sales people and deploy a pyramid-shaped commission system.

There have been several cases where such operations turned out to be Ponzi schemes.

Now, following a public outcry over the deaths of two sales people, Tianjin police launched a crackdown on MLM operators in the city.

The local Communist Party chief is said to have ordered that all illegal marketing activities be shut down within 20 days.

About 3,000 officials have been mobilized for the crackdown. So far, they are said to have found over 420 MLM offices and arrested 85 key people behind the activities. 

According to a Chinese website, MLM operators are most active in the eastern and southern provinces of China, with Jiangsu, Anhui and Guangxi especially the big hubs.

The victims are mostly graduate students who are looking for jobs and have very little knowledge of how MLM works.

According to observers, there are two different kinds of MLMs in China — one type operating in the south of the country and the other in the northern regions.

In the North, the MLMs are more low-key and claim to operate through “social networking”, while the MLMs in the South say they are keen to operate using “capitalist methods”.

The marketing firms con students into joining the groups, by promising that the members can enjoy travel and other opportunities.

The unsuspecting youth are brainwashed into believing that they would be embarking on an adventure while also getting the chance to make good money, rather than being informed of the actual reality of impossible targets and high-pressure work.

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