Network Marketing in Kazakhstan

Kazakhstan, as a country with a rapidly developing economy, is a very promising market for network business development in Central Asia. Each year, the number of network marketers in Kazakhstan is growing dynamically, and more and more local entrepreneurs are launching their own MLM projects. However, before creating an MLM company in this country or entering a new market, it is necessary to understand the nuances of its legislation and mentality.

Features of network marketing in Kazakhstan

According to Liter.kz, the total turnover of the network marketing industry in Kazakhstan reached over $356 million in 2023. MLM companies also employ approximately 1 million Kazakhstanis, with over 35,000 of them being registered entrepreneurs.

Like any other country, MLM business in Kazakhstan has its own peculiarities. Local networkers prefer to conduct meetings with potential clients or partners in person. This is primarily due to the high value placed on family ties and personal connections. Kazakhstani mentality also inherently includes openness - they are happy to communicate with strangers. Therefore, Kazakhstani networkers experience recruiting difficulties significantly less often compared to their Western counterparts.

Despite the importance of personal meetings, the rapid development of the e-commerce sector in the country is now changing the rules of the game in MLM business. According to The Astana Times, online sales in Kazakhstan have grown to $4.4 billion in 2022 alone, and by the end of 2024, an increase to $6.6 billion is expected. Influenced by these trends, more and more Kazakhstani networkers are starting to use social media and other online channels, significantly simplifying the process of attracting clients.

When creating a network business in Kazakhstan, also consider that people here usually focus on product realization rather than on finding partners and team training. When the conversation turns to business growth and development, Kazakhs often shift to discussing ways to increase turnover - it is clearer and more familiar for them to develop in sales.

It can be concluded that Kazakhs are sociable and good at selling, which contributes to the successful growth of MLM business in the country. However, looking at the network marketing industry in Kazakhstan from another perspective, its methods are not always used for the greater good.

Financial Pyramids in MLM

Effective network marketing strategies in Kazakhstan are also used by scammers, creating financial pyramids disguised as MLM companies. In 2022 alone, more than 22 companies with signs of financial pyramids were uncovered in the country, with total losses from their activities amounting to $16.8 million.

Most often, scammers involve people in binary options and various investment funds. The general essence of such pyramid schemes is that the initial contribution for entry is usually small, and the promised "payout amount" to participants is significant, which lures people in.

In detail, we have explained how financial scams work and how to detect them in the article Network Marketing VS Pyramids.

The government of Kazakhstan is actively combating such fraudulent schemes. In 2022, the country even launched an online service called "Baiqa, piramida!", which allows Kazakhs to check any company for signs of a financial pyramid.

Legality of Network Companies in Kazakhstan

The network marketing industry in Kazakhstan is absolutely legal and protected by law. Each distributor can officially register as an entrepreneur and engage in "Retail trade through network marketing" (subclass 47.99.2. in the general classifier of types of economic activities (GC-RC 03-2007)).

Also, in 2005, the "Rules of retail trade outside retail outlets through network marketing" were approved, which clearly define what network business is. According to these rules, MLM is a type of retail trade outside retail outlets, in which independent sellers operate, distributing goods independently or by attracting other agents; their earnings consist of income from personal sales and commissions from sales of other agents they have recruited into the network.

Furthermore, within this country operates the Association of Direct Sales of Kazakhstan (ADSK). Cosmetic companies Avon, Mary Kay, Faberlic, and Oriflame, which directly compete with each other, decided to unite and create ADSK with one global goal - to revive the reputation of network marketing and protect the rights of their sellers. Membership in ADSK guarantees that the company operates to the highest standards in product quality. In addition, network companies are supervised by the World Federation of Direct Selling Associations.

Top Network Companies in Kazakhstan

The market in Kazakhstan is filled with companies that were created outside this country - these projects are among the top on an international level, and it would be very banal to include them in the ranking for Kazakhstan. Among the local organizations, we have highlighted:

1. Global Trend

Website - https://globaltrendcompany.com/

Year of establishment - 2018

Marketing type - hybrid

Specialization - health products

Global Trend is a trademark of LLP "SPA-SKY Production", and their marketing plan was developed by our team FlawlessMLM. But they entered the rating thanks to their achievements and the speed of growth of the partner structure. At the project launch, Global Trend only had Nano balsams - a concentrate of natural pomegranate juice. In 2021, they expanded their product line - they sell various oils, toothpastes, and facial care cosmetics.

2. Gtime

Project website - http://gtime.kz/

Year of foundation - 2012

Marketing type - matrix

Specialization - watches, health products, and shungite

Gtime products are sold in more than 80 countries near and far abroad. They have built several production plants, purchased their own business center, own the G-TIME CORPORATION car dealership, and the G-TIME TRAVEL tourist company.

3. Toplife

Project website - https://tl-holding.com/

Year of establishment - 2012

Marketing type - linear, 7 levels

Specialization - functional nutrition

Initially, Toplife's range included cereal cocktails "Fit cocktail", and then they expanded their product line - added products for home hygiene and cleaning, a line of protein cocktails, tonic drinks, etc. In 2020, they built a plant for the production of eco-products for home care and cosmetics, and in 2021 they expanded their range by 20 items.

Summary

The network marketing industry in Kazakhstan continues to demonstrate active growth, attracting more and more entrepreneurs and distributors. People here prefer to develop companies in the Health & Beauty niche, and MLM projects with a simple physical product and a clear bonus structure are gaining popularity. Therefore, if you want to successfully develop your MLM business in Kazakhstan, it is extremely important to choose the right product for implementation, create a transparent marketing plan, and consider the nuances of local legislation.