ABSTRACT
In January 1998, Xingsha, a small town 10 km outside Changsha, Hunan (itself well known in China as Mao Zedong’s hometown), was dubbed by a hostile media as China’s first “multilevel marketing city.” Multilevel marketing, otherwise known as direct sales or network marketing, is a system whereby vertically integrated networks of so-called distributors both consume and sell products. 1 Two years before, Xingsha had a population of 10,000, but when the Hunan Kangfubao Exercise Equipment Company started developing marketing networks in the area, everything began to change. Kangfubao was selling one of the Chinese multilevel marketing industry’s most popular products, colloquially known as the “swaying machine” (yaobai ji). It was a plastic box the size of a smallish typewriter, with a pair of hollows where one’s heels rested while lying supine on the floor. When turned on, the hollows shifted from side to side, gently wiggling the entire body in what was described as a goldfish-like movement. This type of “anaerobic” movement was said to increase the amount of oxygen in the blood, thereby curing any number of conditions, including among others heart disease, diabetes, cancer, stomach upset, skin disease, paralysis, and indigestion. As with most multilevel marketing (MLM) products, the Kangfubao machine cost more than double what it would in a state-owned store.
