From February 21 to 22, Wuhan, Beijing, and Qingdao added 14, 4, and 1 new positive cases of the new crown, and these 19 positive cases all pointed to the same company - Nu Skin (China) Daily Use, a subsidiary of Nu Skin Group A training session organized by Health Products Co., Ltd. (hereinafter referred to as "Nuxin China").
In response to this matter, Nu Skin responded to the media that it was an annual meeting held by Shanghai dealers in violation of regulations and without reporting to the headquarters for approval.
The last time the Nu Skin Group attracted such widespread attention was in 2019, when a woman was ill and refused to take medicine, only drinking Nu Skin juice, because she believed in the claim of Nu Skin juice to dissipate heat and detox, and eventually died of a lung infection.
Through interviews and sorting out, the Red Star Capital Bureau found that since Nu Skin Group officially entered China in 2003, it was suspected of pyramid schemes and organized gatherings for "brainwashing"... The controversy has never stopped.
Nu Skin training can cause multiple infections
From February 21 to 22, Wuhan, Beijing, and Qingdao added 14, 4, and 1 new positive cases of new crowns, and these 19 positive cases all pointed to an offline training session held by Nu Skin in Wuhan.
On the afternoon of February 22, Wuhan held a press conference on the prevention and control of the new coronary pneumonia epidemic, reporting 14 new confirmed cases and the situation of the infected person and the venue of the activity.
According to the report, 13 cases were trainees of a company's training class, and 1 case was a family member of a certain student.
The training period was from February 18th to 20th, held in Gloria Hotel in Wuchang District and Huaqingyuan Community in Jiang'an District, with a total of 66 trainees.
According to the cover news report, the hotel said that during the entire conference, there were about 180 guests, mostly tourists from other places, and dozens of art candidates from all over the world.
The organizer of the training session where the outbreak occurred this time was Shanghai Sheyao Marketing Service Center, the Shanghai distributor of Nu Skin China.
Nu Skin responded to the media that the training was an annual meeting held by Shanghai dealers in violation of regulations and was not reported to the headquarters for approval.
According to upstream news reports, Gu Mou, the legal representative of Sheyao Company, said that he was indeed the leader of this training course. The following people attended the training course, including the following dealers, business partners, and their relatives and friends. .
Gu said: "It's not really training in the strict sense. I just want to get together. Beijing is picking stars. We discussed coming to Wuhan for the gathering, and the people who came also brought relatives and friends. The teams exchanged experiences with each other. , corporate culture, sales ideas. Everyone is very motivated, just want to sell the product well.”
Regarding the question of MLM, Gu said: "We are a regular enterprise."
At the Beijing Epidemic Prevention and Control Press Conference held on February 22, the trajectory of newly confirmed cases in Haidian was announced, involving a cafe in Fenglian Plaza and Nu Skin stores.
On the afternoon of February 22, a reporter from the Red Star Capital Bureau went to Fenglian Plaza, Chaowai Street, where the Nu Skin store is located in Beijing.
The reporter noticed at the scene that a cordon had been set up in front of Fenglian Plaza, and the parking lot leading to Fenglian Plaza had also been closed.
More than 20 medical staff in protective suits arranged for people in the building to do nucleic acid tests in batches in the open air outside the door.
The Nu Skin Intelligent Experience Center at the back of Fenglian Plaza has also been closed, and there is also a "no entry" warning line in front of the door.
Some on-site staff told the Red Star Capital Bureau that Fenglian Plaza was closed around 11 am, and nucleic acid testing was carried out in batches.
Some people in the building said that when they received a notice from the property at noon, they only told that there were confirmed cases who had come to the building, so that all staff should stay in the company and reduce going out.
After the Spring Festival, new cases of new crowns appeared in many places, and many companies took measures to avoid offline gatherings, but Nu Skin China's distributors still held offline training sessions.
Through interviews and sorting out, the Red Star Capital Bureau found that "gatherings" are an important part of Nu Skin's daily operations.
At the same time, controversies of alleged pyramid schemes and brainwashing have been surrounding the company.
Starting from Nu Skin Group:
The number of employees reaches 26,000, and it has been listed on Forbes many times
According to public information, Nu Skin Group is a company specializing in personal care products and nutritional supplements. It was founded in 1984 by Blake M.Roney, Sandra N.Tillotson and Steven J.Lund and is headquartered in Utah, USA. Listed on the New York Stock Exchange, it entered the Chinese market in 2003.
According to Tianyancha, Nu Skin China used to be called Shanghai Nu Skin Daily Health Products Co., Ltd. It was established in 1993 and is a limited liability company wholly owned by a foreign legal person. It is registered in Shanghai and has a registered capital of US$30.07 million.
Red Star Capital Bureau inquired the website of the Ministry of Commerce and learned that on July 22, 2006, Nu Skin China officially obtained the direct selling license, including 25 branches, 225 service outlets, 121 direct selling products, and 190 direct selling trainers ( 190 people are registered and 365 people are cancelled).
In 2014, when Nu Skin Group celebrated its 30th anniversary, it built its largest work park in the world, the Greater China Innovation Headquarters Park, in Shanghai.
The innovation park is located in the most core area of Shanghai Industrial Comprehensive Development Zone, with an investment of nearly 500 million yuan.
At that time, the Greater China region had become the fastest-growing region of Nu Skin's 53 global markets, and in 2013 it became the first regional market in the world to exceed US$1 billion.
According to Forbes’ official website, Nu Skin Group has successively been listed on the Forbes 2021 Global Best Female-Friendly Companies List and Forbes 2022 America’s Best Mid-Sized Employers List. As of February 10, 2022, the number of Nu Skin Group employees 26,000 people.
On February 16, Nu Skin Group announced its financial report. The data showed that as of the end of 2021, the company's total assets reached 1.906 billion US dollars, and its annual revenue was 2.696 billion US dollars, a year-on-year increase of 4.41%; the net profit attributable to the parent was 147 million US dollars, a year-on-year decrease of 23.04%. %; the gross profit margin of sales is as high as 74.95%, and the net profit margin of sales is 5.46%.
However, under the guise of direct selling, Nu Skin Group has never ceased to question the suspected pyramid scheme of its operation.
Interview with the lawyer involved:
This is a typical MLM company
The last time Nu Skin China received widespread attention was in 2019, when Lin, a 34-year-old Nu Skin salesperson, fell ill by drinking Nu Skin juice to “detox” and refused to seek medical treatment, and eventually died unfortunately.
Nu Skin issued a statement in response to the incident, saying that after an internal investigation by the company, the dealers involved had rescinded their contracts and terminated their cooperation due to violations of the company's relevant regulations.
According to reports, Lin's friend once said that Nu Skin's training is making people hostile to traditional medicine.
They (Nu Skin) claim that 95% of their medicines are ineffective, and if you really love your family, keep them away from medical treatment.
Zhang Xiaoling, a lawyer from Beijing Haodong Law Firm, is the lawyer for Lin who "drinks Nu Skin juice to delay treatment".
On February 22, Zhang Xiaoling said in an interview with the Red Star Capital Bureau: "This company is a typical pyramid selling company."
Zhang Xiaoling said, "Around 2019, I accepted the entrustment of a total of 4 parties to sue Nu Skin China." Among these 4 people, in addition to Lin, there is another party who also believes in the words of Nu Skin's teacher- - Stayed away from medical treatment and ultimately missed the treatment period and tragically died, and two others became critically ill.
"However, these four cases were settled in court." According to Zhang Xiaoling, since all four families received high compensation and signed the "Confidentiality Agreement", "I remember that the Nu Skin team that handled this matter was very capable. The matter was quickly resolved, including the handling and handling of the family. Although they eventually settled in court, the company is still operating today."
In Zhang Xiaoling's view, Nu Skin China should have been investigated long ago.
According to Zhang Xiaoling's information, the company has built a "pyramid" structure, and the more levels it develops, the more economic benefits it will obtain.
Zhang Xiaoling said: "Although it has been a few years since the incident, after all, the company's business model has been developed for many years, it is impossible to change a new development model. Now it may be changed to a new name, but the soup will not change the medicine. "
Zhang Xiaoling provided Red Star Capital Bureau with a Nu Skin internal courseware describing the company hierarchy.
According to Nu Skin’s teacher’s explanation, the first level of Nu Skin is a star-rated customer – if you spend more than 500 yuan, you are eligible to register a Nu Skin VIP card number.
The second level is a trainee retailer - the "self-use + sharing" turnover exceeds 5,000 yuan, and it is eligible to sign a trainee retailer contract with Nu Skin, with a 10% retail profit.
The third level is the official retailer - within 4 months, the "self-use + sharing" turnover exceeds 30,000 yuan, and it can be changed to an official retailer.
Official retailers have to complete a monthly turnover of 15,000 yuan, which includes the amount used by themselves and recommended to their friends. Among them, 20 to 30 people share, and each person uses Nu Skin products for an average of 800 to 1,000 yuan per month. There will be a stable turnover of 20,000 to 30,000 yuan, and the company will give 10% to 30% of retail profits.
In addition, those who complete 15,000 yuan before the 14th of each month will receive an additional reward of 1,000 yuan; those who complete 20,000 yuan before the 21st will receive an additional 1,000 yuan; and those who complete 30,000 yuan before the end of the month will receive an additional 1,000 yuan.
The fourth level, if among the people recommended by it, can cultivate 4 dealers, it will enter the rating of "business manager".
Completing the task of "cultivating 4 dealers" in any 4 months within a year, the company will reward two persons for a luxury overseas trip.
At the same time, the company will also give a 5% bonus.
"4 dealers, the average is calculated at 20,000 yuan per dealer, the turnover of 4 dealers is 80,000 yuan, according to the 5% incentive, plus your turnover and retail incentives, the monthly income of the business manager Between 10,000 and 20,000 yuan.”
In the courseware, the teacher of Nuxin said, "The 4 dealers recommended for training are equivalent to 4 franchise stores. If the 4 dealers continue to develop, the average of 4 dealers recommended by each person is 16 dealers, which is equivalent to 4 franchisees. In 16 franchise stores, 16 franchise stores recommend 4 each, which is 64 franchise stores." The teacher introduced, "The development of these franchise stores is all related to you, and the company will give you 5% of the profit. The average profit of a franchise store is calculated at 20,000 yuan, and you can get at least 80,000 yuan in rewards every month. In the teacher's view, the profits of all dealers come from two parts: first, the retail profit part, which belongs to Labor income. Second, the channel field of the established franchise network is passive income, that is, asset-based income.
Zhang Xiaoling told the Red Star Capital Bureau that in terms of Nu Skin’s business model: first, it has formed a certain upper and lower level structure and has a certain number of people; second, participants have a certain economic expenditure to obtain membership; The basis of profit, each member will also have benefits when it develops offline, and the more members it develops, the greater its economic benefits.
"This is a typical pyramid scheme." Zhang Xiaoling said.
People's Daily "Three Exposes Nu Skin Scam
"
In fact, as early as 2014, the People's Daily published three articles in a row exposing the "Nuxin scam".
People's Daily pointed out in the report that Nu Skin fabricated scientific research results, promoted false information, and encouraged everyone to join the Nu Skin direct sales team.
To become a Nu Skin direct seller, you need to purchase Nu Skin products first. Nu Skin also divides the direct sellers into 7 levels based on the number of product sales and the number of offline people who are suspected of pyramid selling.
In addition, Nu Skin often organizes large gatherings to "brainwash" direct sellers, creating role models and using group effects for mental control.
A reporter from People's Daily participated in the "2014 NU SKIN Xingfeng Conference" held by Nu Skin in a hotel in the suburbs of Beijing.
At the scene, nearly 20,000 people from Taiyuan, Shijiazhuang, Tianjin and other places gathered, the lights flickered and the sound thundered.
The conference includes elite recognition, on-site interviews and other links.
Those who were commended stepped onto the podium one by one and shouted loudly to lead the audience to shout slogans.
Nearly 20,000 people in the audience followed the drum beat with toy palms, creating a frenetic atmosphere.
According to people familiar with the matter, the company has meetups and training sessions with different content almost every day.
Hu Jiang, a lecturer at the Law School of Southwest University of Political Science and Law, believes that this kind of behavior is suspected of mind control, commonly known as "brainwashing".
Not only in China, but also the United States has never stopped questioning and investigating the business model of Nu Skin.
In 1991, the judiciary of six states in the United States launched an investigation into Nu Skin.
In 1997, the Pennsylvania attorney general accused Nu Skin of conducting pyramid schemes through a branch called QIQ.
In 1994, after being investigated by the US Federal Trade Commission (FTC), Nu Skin exaggerated product efficacy and distributor profits.
In 1997, the FTC accused Nu Skin of falsely advertising its products for weight loss and muscle growth, and Nu Skin once again handed a $1.5 million fine to the U.S. Federal Trade Commission.
In response to Nu Skin's practice of passing the responsibility to front-line dealers, People's Daily interviewed Yue Yunsheng, director of Beijing Yuecheng Law Firm.
Yue Yunsheng said that for a company, there may be a variety of business models, such as setting up branches, or even relying on lower-level management teams.
However, he said that since the branch does not have the status of an independent legal person, all the business consequences and legal responsibilities of the branch are borne by the head office; for the management team, as long as it belongs to the head office or a branch under the head office, and If the business is expanded in the name of the head office or branch, then the operation consequences and legal responsibilities of the management team should be borne by the head office.
Experts said that as long as the business entity does not have the status of an independent legal person, its business behaviors are all duties, and the head office should be held responsible.
Red Star News reporter Wang Tian Li Chen