Lyoness' unlimited growth potential

Anyone (formerly) involved with Lyoness or familiar with its propaganda has probably heard the bogus argument used by Lyoness to guarantee its investors that investing in Lyoness will bring 'unlimited benefits' for life (i.e. 'a passive income'): Lyoness will always grow, because it is based on 'the power of never-ending consumption'.

This claim is of course easily contestable, as Lyoness is in no way based on consumption (only 10% of the members ever used one of Lyoness' discount options, 99.7% of the Lyoness turnover derives from down-payments, not shopping, and the average member saves up a few euros per year). Instead, the Lyoness 'business model' runs on an 'endless' chain of new investors and investments, in order to pay off earlier investors. Such a chain is inherently finite.

The same argument has been used by Lyoness to deceive its investors into believing that Lyoness will continue to grow and that we are 'just in the beginning'. Over time, a Utopian world will develop in which everyone shops through Lyoness and every single self-respecting company or shop owner will be connected to the Lyoness network. In countries where Lyoness is just starting out, the Lyoness promoters point at Austria and Eastern Europe to show how much the local network is expected to grow within the first few years (of course, forgetting to mention that the growth rate inherently and drastically declines afterwards). However, another country where Lyoness started out early, and where most of its corporate structures are registered - Switzerland - is often omitted from the discussion.

This is not without a reason. Earlier, this Blog has reported that Lyoness is effectively-bankrupt and that particularly in Switzerland, Lyoness seems to be decreasing in size, rather than growing. Also, from the very start in Switzerland, Swiss media have extensively reported on the Lyoness racket and denoted its 'business model' as a pyramid scheme. Consequentially, important 'partners' decided to publicly distance themselves from Lyoness and explain that they were unaware of their apparent ties to this scam.

Today, at the Ktipp forum, an interesting text was published by a commentator going by the alias 'PonziCharles'. In response to a Lyoness promoter claiming that Lyoness 'thrives in Switzerland', he discusses that although Lyoness is active for quite a while now in Switzerland, very few companies accept the Lyoness membership as a reason for giving out a discount.

In Zurich, Switzerland's largest city with 400,000 inhabitants and 38,000 registered companies, 40 merchants are part of the Lyoness network (roughly 0.1%). Geneva, the second largest city with 200,000 inhabitants - 9 registered merchants. Basel, number 3 in the list, 180,000 inhabitants, 8 merchants. Number 4, Lausanne, 140,000 inhabitants - 6 merchants.

Not very impressive, now is it?