By YEOW POOI LING
PETALING JAYA: Hai-O Enterprise Bhd has developed over 110 millionaire entrepreneurs, of whom 95% are bumiputra, since the setting-up of its multi-level marketing (MLM) division.
These entrepreneurs, supported by a group of down-line agents, are known as crown diamond managers (CDM). Last year, more than 10 entrepreneurs earned RM1mil each.
The commission structure is subject to the performance of the CDM as well as sales generated by his down-line agents.
“It is not easy to reach this level. All the CDMs earn five-figure incomes every month,” group managing director Tan Kai Hee said during the appreciation dinner yesterday.
He added that the partnership shared between Hai-O and the CDMs promoted integration between the bumiputras and the Chinese. Hai-O imports and markets a wide range of traditional Chinese medicines.
Financial controller Hew Von Kin told StarBiz the MLM division's contribution to revenue this year was anticipated to increase to over 75% for the year ending April 30, 2008 (FY08) from 50% in FY07.
Hai-O's third quarter results, which would be released next month, would remain “intact” given the buoyant performance of the MLM division, he said.
In the first six months ended Oct 31, 2007, Hai-O made a net profit of RM16.2mil, or 91% higher than the previous corresponding period as revenue grew 72% year-on-year to RM139.8mil.
“Our training programme does not merely focus on direct selling but includes cultivating entrepreneurial skills like marketing and promotions, inventory management, cashflow management as well as people management,” Hew said, adding that these skills could also be used in other businesses.
Every month, Hai-O sees about 2,000 new recruits joining the MLM business. Hew noted that the trend had moved towards the younger generation, including those with university degrees and professional experiences.
He said the MLM division still had a lot of room for growth, as the buying and selling momentum was strong given the variety of products.
During the dinner, the group donated about RM100,000 to four orphanages.