QNet Review: How is this MLM company still in business?
QNet was founded in 1998 and is headquartered in Hong Kong.
As far as I can tell though, other than existing there in name, QNet has no business operations in Hong Kong itself.
The company was founded by Vijay Eswaran (right), who is based out of Malaysia. For all intents and purposes, QNet operates as a Malaysian company.
So the story goes;
In the mid-90s, Vijay Eswaran and Joseph ‘Japa’ Bismark, two young men from drastically different backgrounds came together in business and friendship.
Having found reasonable success in network marketing with an American company that was doing extremely well in the Philippines, the two joined forces and their group called the V Team consisting of bright, motivated and talented men and women, soon became the largest revenue earner for the American company.
At one point they realised that the Company was being dishonest with them and after all efforts to rectify the situation failed, the V Team and a few of their leaders sat around Vijay’s kitchen table to discuss the next steps.
About 1,500 people who had believed in the V Team leaders had joined the team. What were they going to tell them?
The easy way out was to tell them what the company owners did and wash their hands off any culpability.
However, they did not choose the easy way out.
With the fate of thousands of their team members at stake, and a liability in excess of USD 250,000, the two young men along with their core team members made a bold and crazy decision to start their own company, with the sole purpose of looking after the interests of the people who had trusted them and put their life’s savings into their hands.
On that fateful day in September 1998 in the Philippine Stock Exchange Centre (formerly Tektite Towers) in Manila, Philippines, the company today known as QNET was born.
QNet originally started out as QuestNet and promoted gold and silver coins.
In addition to GoldQuest and QI Limited, QNet has spawned at least 76 related shell companies.
QNet itself is a subsidiary of QI Group, which oversees the company’s operations globally.
The reason for this appears to be mitigation of corporate liability.
QNet sets up shop in a country under a different name. With QNet headquartered in Hong Kong, the company has been very careful not to conduct business in either Hong Kong or China.
Why, you ask?
Aside from Malaysia, QNet has run into regulatory trouble in pretty much every country it’s established a significant presence in.
- the Philippines’ Department of Trade and Industry issued QuestNet a cease and desist (2003)
- the Royal Monetary Authority of Bhutan conducted an investigation into GoldQuest and found it to be a pyramid scheme (2003)
- the Nepalese Home Ministry banned GoldQuest from operating in Nepal (2003)
- the Sri Lankan government banned GoldQuest (2005)
- the Iranian government banned GoldQuest (2005)
- An Interpol alert resulting from a Philippine investigation saw Vijay Eswaran and several GoldQuest officials arrested in Indonesia, they were released and the charges dismissed after three weeks (2007)
- Afghanistan withdrew QuestNet’s license to conduct business (2006)
- Rwanda’s Ministry of Finance banned QuestNet after the National bank of Rwanda declared it a pyramid scheme (2008)
- Sudan banned QuestNet (2009)
- Syria’s Ministry of Economics shut down QuestNet for violation of commercial registration laws and operating a pyramid scheme (2009)
- Turkey issued a warning against QNet, after an investigation revealed it was simply a rebranding of the QuestNet pyramid scheme (2011)
- Dar al-Ifta al-Misriyyah, the Egyptian government’s educational institute, issued a fatwa declaring QNet’s business model haram (2010)
- Saudi Arabia’s Ministry of Commerce and Industry banned QNet amid accusations of theft, falsification and failure to register (2010)
- India’s EOW froze several bank accounts tied to QNet as part of a major bust (2013)
- the Philippines’s SEC revoked QNet’s license to conduct business in the Philippines (2014)
- the Chairman of the Fatwa Commission of the Indonesian Ulema Council concluded the business model was not haram (it contained “elements of fraud”) and issued a fatwa (2014)
- India’s EOW prohibited QNet and its Indian subsidiary Vihaan from holding workshops and training sessions in Mumbai (2014)
- Central Police in Azerbaijan opened a criminal case into QuestNet, to investigate claims of fraudulent appropriation of money (2014)
- India’s EOW (Delhi) filed a First Information Report against Qnet and Vihaan Direct, alleging the companies were engaged in cheating and fraudulently operating an MLM scheme (2016)
- Authorities in Burkina Faso labelled QNet “a network of crooks” (2016)
As a result of QNet’s fraudulent global business operations, its management and affiliates have been arrested in India, Indonesia, Turkey, Iran, Azerbaijan, Burkino Faso, Nepal and Algeria.
QNet founder Vijay Eswaran is currently a wanted fugitive in India.
Marketing copy on the QNet website also appears to be somewhat antiquated.
QNet claims to be one of “Asia’s leading direct selling companies”, however the scheme today appears to be predominantly promoted in Africa.
Alexa estimate the top sources of traffic to the QNet website are Cameroon (8.2%), Morocco (7.5%), India (6.4%), Tanzania (5.5%) and Algeria (5.4%).
With the exception of India, QNet appears to be all but collapsed across Asia.
As above, African authorities have only recently began cracking down on QNet. QNet’s operations in India are in turmoil, following multiple arrests and asset seizures across the country.
Read on for a full review of the QNet MLM business opportunity.
QNet market a range of products across health and wellness, personal care & beauty, watches and jewelry, education, holidays, technology and motor care niches.
Health and Wellness
- HomePure water filtration products
- AirPure air purifier products
- Ole olive leaf extract
- VitaNet nutritional supplements
- LifeQuode food supplements
- Amezcua “harmonized energy” products
- Qafe green coffee
Personal Care and Beauty
- Physio Radiance hypoallergenic skin care range
- DEFY skin care for men
- BioSilver skin cleanser
- Couleurs makeup
- Bell & Belle face and bath cream
Watches and Jewelry
- a selection of QNetCity branded Cimier watches
- Bernhard H. Mayer watches and jewerly
- Himalayan Crystal Collection jewelry
- Swiss eLearning Institute e-courses (not accredited)
- Master of Business Administration, Accelerated Bachelor of Business Administration – Information Technology and Accelerated Bachelor of Business Administration, offered through SMC University (formerly Swiss Management Center)
Note that the above is what is referenced on the QNet product section of their website.
The QNet online store only lists three “English for Beginners” courses costing $620 each.
- Tripsavr discount travel booking portal
- QVI Club discount resort vacations
- Q-breaks short break vacation packages
- QVI Points redemption points (can be put towards discounted accommodation, guided tours, adventure activities, car rentals and cruises)
- BrilTime offers BrilCloud online storage and BrilNet web conferencing services
- QNet Life Site sales and marketing tool service
- Vtube+, an “internative online video community dedicated to network marketing” (looks like a YouTube clone)
Titan Metal Treatment made with Zero Friction Technology is a metal treatment oil for cars, motorbikes, lawn mowers, heavy vehicles and machinery, among others.
Its one-of-a-kind nanotechnology penetrates into the smallest crevices of your engine (known as micropores) and forms a tough low friction shield.
This low friction shield is able to withstand up to 5 times more weight and friction when compared to other high performance lubricants such as mineral and synthetic-based engine oil and oil treatment.
There are far too many QNet products to list here individually, however a full retail catalog is available on the online store section of the QNet website.
The QNet Compensation Plan
QNet’s compensation plan rewards affiliates for making retail sales, purchasing products and/or recruiting others who do the same.
Commissions are paid directly (retail) and residually through binary and unilevel compensation structures.
QNet Affiliate Ranks
There are eight affiliate ranks within the QNet compensation plan.
Along with their respective qualification criteria, they are as follows:
- Independent Representative (IR) – sign up as a QNet affiliate
- Bronze Star – generate at least 50 RSP a month (residual unilevel commission qualified)
- Silver Star – recruit at least three affiliates who each generate 500 PV or two affiliates who each generate 1000 PV
- Gold Star – personally generate at least 500 PV, generate at least 600 RSP across your unilevel team, earn at least two binary step commissions and remain residual unilevel commission qualified
- Sapphire Star – personally generate at least 1000 PV, generate at least 2000 RSP across your unilevel team, earn at least forty binary step commissions and remain residual unilevel commission qualified
- Platinum Star (qualification criteria must be met for two consecutive months) – maintain 1000 PV a month, generate 5000 RSP from at least two unilevel team legs (max 2500 GV from one leg), earn at least 120 binary step commissions and remain residual unilevel commission qualified
- Diamond Star (qualification criteria must be met for two consecutive months) – generate 2000 PV a month, generate 15,000 RSP from at least two unilevel team legs (max 7500 GV from one leg), earn at least 200 binary step commissions, have at least thirty Sapphire or higher ranked affiliates in your downline (at least one personally recruited Platinum Star) and remain residual unilevel commission qualified
- Blue Diamond Star (qualification criteria must be met for three consecutive months) – generate 3000 PV a month, generate 20,000 RSP from at least three unilevel team legs (max 7500 GV from one leg), earn at least 320 binary step commissions, have at least ten Platinum Star or higher ranked affiliates in your downline (at least two personally recruited Diamond Stars) and remain residual unilevel commission qualified
MLM Commission Qualification
To qualify for MLM commissions a QNet affiliate must first “qualify” and then “activate”.
To qualify a QNet affiliate must generate 500 PV.
PV stands for “Personal Volume” and is sales volume generated via retail sales and/or the affiliate’s own purchase of product.
A QNet affiliate has two ways through which they can activate:
- generate 500 GV worth sales on both sides of their binary team
- recruit at least two “qualified” affiliates
GV stands for “Group Volume and is PV generated by an affiliate and their recruited downline.
QNet pay retail commissions on products ordered by retail customers.
The QNet compensation plan defines retail commissions as ‘the difference between the price paid by your customer and your discounted price as an IR’ (Independent Representative).
Residual Commissions (binary)
A binary compensation structure places an affiliate at the top of a binary team, split into two sides (left and right):
The first level of the binary team houses two positions. The second level of the binary team is generated by splitting these first two positions into another two positions each (4 positions).
Subsequent levels of the binary team are generated as required, with each new level housing twice as many positions as the previous level.
Positions in the binary team are filled via direct and indirect recruitment of affiliates. Note there is no limit to how deep a binary team can grow.
GV is generated via affiliate and retail purchases within the binary team.
Commissions are paid when 3000 GV is matched on both sides of the binary team.
This match of 3000 GV on both binary team sides is referred to as a “step”.
How much of a residual binary commission is paid per 3000 GV match is determined by affiliate rank:
- Bronze Stars earn $200 per step (capped at 40 steps a week)
- Silver Stars earn $225 per step (capped at 50 steps a week)
- Gold Stars earn $250 per step (capped at 60 steps a week)
- Sapphire Stars earn $260 per step (capped at 65 steps a week)
- Platinum Stars earn $275 per step (capped at 70 steps a week)
- Diamond Stars earn $300 per step (capped at 80 steps a week)
- Blue Diamond Stars earn $325 per step (capped at 90 steps a week)
When a QNet affiliate signs up, they are given three binary positions.
This is increased by one per 1000 PV they generate (up to two per single product order).
Residual Commissions (unilevel)
A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):
If any level 1 affiliates recruit new affiliates, they are placed on level 2 of the original affiliate’s unilevel team.
If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretical infinite number of levels.
QNet pay residual unilevel commissions based on “Repeat Sales Points” (RSP).
An affiliate must personally generate at least 50 RSP a month to qualify for residual unilevel commissions.
RSP is generated via retail customer sales, an affiliate’s own purchase of product and that of their downline (up to ten unilevel team levels).
Generated RSP in a QNet affiliate’s unilevel team is paid out weekly at a rate of 10,000 RSP = $400.
How many unilevel team levels generated RSP is counted from is determined by affiliate rank:
- Affiliate to Silver Star generate RSP on five unilevel team levels
- Gold Stars generate RSP on six unilevel team levels
- Sapphire Stars generate RSP on seven unilevel team levels
- Platinum Stars generate RSP on eight unilevel team levels
- Diamond Stars generate RSP on nine unilevel team levels
- Blue Diamond Stars generate RSP on all ten available unilevel team levels
Note that RSP generated on level 2 of the unilevel team is counted at 200%.
If a QNet affiliate generates less than 10,000 GV across their unilevel team, they are paid pro-rata based on generated volume.
The rate of 10,000 GV = $400 works out to 4% paid on generated unilevel team GV.
The Early Payout bonus rewards a QNet affiliate for generating 1000 GV on their lesser binary team
- generate 1000 GV in weaker binary team side volume within four weeks of signing up and receive $50 bonus
- generate another 1000 GV in weaker binary team side volume within six weeks of signing up and receive another $50 bonus
- generate another 1000 GV in weaker binary team side volume (no time limit) and receive another $125 bonus
Rank Achievement Bonuses
QNet reward affiliates for qualifying at the Diamond Star and Blue Diamond Star ranks with a one-time $10,000 and $30,000 respective bonus (new rank must be maintained for six consecutive months).
Platinum, Diamond and Blue Diamond affiliates who maintain rank for 12 consecutive months are rewarded with “exciting all-expenses paid travel and lifestyle incentives”.
V Ambassadors and QNet Founder (no qualification criteria provided) are rewarded with invitations to
exclusive events and more money-can’t-buy experiences celebrated with your fellow achievers, esteemed V Ambassadors and QNet Founders.
QNet affiliate membership is $30 annually.
If there’s any weight to the “where there’s smoke there’s fire” idiom, QNet is a raging forest fire that should have burnt out years ago.
As far as I can tell, the only reason QNet is still in business is the excessive use of shell companies, for no other reason than to confuse authorities and make investigations harder, coupled with hopping from one market to the next as they each collapse.
As QNet slowly spreads across Africa, it seems Asia is well and truly done. Europe and the US remain, although if QNet hasn’t made a crack of it after eighteen years, it’s doubtful they will now.
The crux of legitimacy for QNet lies in their PV requirements. These can either be generated via retail sales or an affiliate’s own purchase of product, and therein lies the pyramid scheme issue.
If QNet affiliates are signing up, buying just enough to PV qualify and then just enough to generate 50 RSP a month, they can build a sizeable income doing nothing more than recruiting others who do the same.
To that end QNet heavily focus on “duplication” in their marketing;
Your business plan has been designed for duplication, making its success, transferrable and duplicable.
That is you sign up, buy products to qualify for commissions and then get paid to recruit others who do the same.
The flip side to this is qualification through retail sales, but the fact that so many countries have banned QNet and/or arrested its affiliates for participating in a pyramid scheme is telling.
Also telling is the fact that QNet have had eighteen years to address the likely lack of retail sales taking place (not counting affiliate purchases for qualifying PV or requiring a 50:50 spread of affiliate purchase/retail volume would be a start), but have failed to do so.
Instead of addressing issues with its business model, QNet hop from country to country leaving a trail of financial devastation in any jurisdiction they’ve operated in.
With respect to their product lineup, QNet’s offering is very much an eclectic mishmash of randomness.
There’s no identifiable theme with the different product ranges, making them come off more as whatever QNet management could get their hands on.
And some products are downright weird.
Perhaps the best example is QNet’s Amezcua health and wellness range.
Amezcua is a unique Harmonised Energy product line, designed to increase your harmony and energy levels every day.
“Increased harmony levels”, what does that even mean?
QNet’s kooky Amezcua range includes a “chi pendant”, plastic discs, glass discs, “bio lights” and an “e-guard” (another plastic disc).
To give you an idea of what the Amezcua range is all about, here’s the marketing pitch for Bio Light 2:
The Amezcua Bio Light 2 is specifically designed to take advantage of the concept of biophotons.
Shining the Amezcua Bio Light 2 through the Amezcua Bio Disc 2 helps generate the biophotons to improve the performance of enhancing your energy levels and improving the taste of your foods and beverages.
Light that makes food taste better? Riiiiiiiiiiiight.
QNet claim their Amezcua products are backed by “ongoing research and development”, but fail to provide evidence of any research and development taking place.
There are some paid research papers provided but nothing that remotely resembles a properly conducted peer review from the greater medical community.
Needless to say there’s not going to be a retail market for this junk. And that pretty much sums up the problem with QNet.
For those of you wanting to dig deeper than analysis of QNet’s products and compensation plan, a good start is with the person trying to recruit you.
Every QNet affiliate has to qualify for MLM commissions. What you want to know is whether this person simply recruited their way to qualification, or generated required volume through retail sales.
Make sure you ask for proof, as any pyramid scammer knows how to answer this question when asked (obviously by not being truthful).
Next every QNet affiliate is required to generate 50 RSP a month to qualify for residual unilevel commissions.
Again, what you want to know is how this RSP is being generated. If it’s through a monthly self-purchase and there’s no retail volume equivalent, run.
Given the amount of regulatory concern QNet have triggered over the years, I’d say the answer to both questions is a given. But it doesn’t hurt to check on an individual level.
Mind you you’d have to be pretty desperate to consider QNet to begin with, but I digress.
One contributing factor to the QNet longevity (in addition to numerous name-changes), is that it appears to be a long con.
While there’s no doubt QNet has made a ton of money for Vijay Eswaran and his cronies, for participants it takes the realization that they’ve been had is gradual.
Reaching critical mass and triggering regulatory alerts is even more gradual, by which time QNet’s leaders have moved onto the next country.
A legitimate MLM business will ebb and flow in the various markets it operates in. Scams like QNet launch in a region, reach critical mass and then implode.
That QNet hasn’t resurfaced (or in fact managed to sustain business operations) in any jurisdiction it operates or has operated in says it all.