The rise and fall of iCon Group: Thailand’s e-commerce dream to pyramid nightmare

Whether it is Thailand's largest pyramid selling scheme or its most successful e-commerce business, The iCon Group has stirred a storm that extends far beyond the country’s borders.

Since the first alleged victim contacted police on October 9, more than 4,500 complaints have been lodged against iCon Group covering combined losses of over 1.35 billion baht.

This represents only a small fraction of the company’s network of over 360,000 sellers – thousands of them in neighbouring countries. After the scandal first made headlines early this month, individuals in Laos, Cambodia and Myanmar also came forward to claim they had been cheated by iCon.

Surprise arrests

As allegations mounted earlier this month that iCon Group was a pyramid selling scheme, its founder and chief executive Warathaphon "Boss Paul" Waratyaworrakul, and three celebrities reportedly involved in iCon, were summoned for police questioning.

Warathaphon maintained that his business was strictly in line with the law, while the three celebrities – actor Yuranunt Pamornmontri, actress Pechaya Wattanamontree, and television host Kan Kantathavorn – said they had only been hired as product presenters and had nothing to do with the company’s management.

However, video clips now doing the rounds on social media show these three describing themselves as executives of the company.

In a surprise move, police detained all 18 key suspects on Wednesday, shortly after warrants for their arrest were issued. They were charged with defrauding the public and entering false information into the computer system.

The other suspects include the company's senior executives and top networking marketers. All were remanded pending completion of police investigation after the Criminal Court denied their requests for bail release.

Authorities have seized assets worth more than 1 billion baht from the suspects, including 24 luxury cars, a 63-rai (25-acre) plot of land, 7.5 million baht in cash, and 51 luxury watches. The seized assets' value falls far short of the estimated total damages of over 10 billion baht, although some analysts put that figure 10 times higher given the large number of alleged victims.

How it all began

Warathaphon, reportedly a successful network marketer in a direct-sales company, gathered his trusted colleagues to set up iCon Group six years ago, becoming its only director and CEO.

He is one of only three shareholders, holding 75% of the shares, with his mother (21%) and his girlfriend (4%) reportedly owning the rest. The girlfriend, Puncharat Kanokrakthanaporn, is among the 18 suspects in detention.

Its website states iCon Group was founded in late 2018, with registered capital soaring to 50 million baht after “exponential growth” in the following year. It claims to be Thailand's top-earning e-commerce company.

The “About Us” page states: “The company’s first principle is ‘Morality before business’. That's why we conduct our business in 100% compliance with the law, starting with the company’s founding. We registered with the Office of the Consumer Protection Board [OCPB]."

Role of celebrities

The company managed to lure several celebrities to take various roles. Some served as executives and “investment promoters”, while others were hired as product presenters.

Other celebs said they were approached by iCon but decided not to work with the company after finding its business plan "dubious".

Before his arrest, 61-year-old actor Yuranunt served as iCon Group’s chief research officer. Pechaya, 35, was its chief communications officer, and 38-year-old Kan was chief marketing officer. They were known in the company by their nicknames, "Boss Sam", "Boss Min", and "Boss Kan", respectively.

The other key suspects also adopted the title “Boss” to reflect their important roles at iCon.

The three celebs often appeared at the company’s events along with the CEO, with Kan acting as the emcee. In a promotional video, Kan is shown interviewing “Boss Paul”, who describes iCon as the country’s “Number 1” e-commerce company.

Business scheme

Many of the complainants were lured by iCon’s cheap courses on e-commerce tricks, costing less than 100 baht.

At these events, participants were coerced by company staff into becoming sellers of iCon merchandise, paying 2,500 to 250,000 baht, based on the rewards promised.

Members who paid 250,000 baht or more were promised “lifetime passive income” as the company would take care of their stock stored at its warehouse and deliver the goods whenever orders were made.

Many sellers felt compelled to recruit others in the hope of making more money and earning rewards such as luxury cars and overseas trips. Observers say these people risk being charged with the same crimes as the 18 key suspects.

Some victims reportedly paid more than 1 million baht for multiple dealership accounts in a bid to get rich quickly.

CEO Warathaphon said last week that his company had a total membership of 368,257. Of that number, 285,833 are “distributors” who each paid iCon 2,500 baht, 43,976 are “supervisors” who paid 25,000 baht, 6,476 are “mini-dealers” who paid 50,000 baht, and 31,972 are “dealers” who paid 250,000 baht.

Based on these numbers, iCon earned over 10.1 billion baht from this dealership scheme alone.

These members were also required to make occasional payments for the company to “buy ads” in social media on their behalf, supposedly to boost their sales. However, many complainants said they doubted their money was being used for that purpose.

Massive profits

The company reported a total revenue of 322 million baht and a net profit of 5.9 million in 2019 following its first year of operation. In 2020, its revenue rose to 378 million and profits increased to 9 million.

The company saw a leap in performance in 2021 when the pandemic was at its height. Its revenue soared to 4.9 billion baht with a net profit of 813 million.

The following year, revenue fell to 3 billion baht and net profit shrank to 188 million.

Last year saw a further decline, with total revenue of 1.8 billion baht and net profit of 19 million.

Its financial records submitted to the Commerce Ministry showed that iCon in 2022 lent 413 million baht to unnamed “individuals related to the company” at an interest rate of 0.5% per year, with no loan agreement.

Claims of bribery

Critics claim corrupt officials are partly to blame for iCon Group's exponential growth over recent years.

Complaints arose during the business’s early years, but no action was taken by authorities. Audio clips released by the media suggested that bribes were paid to officials and politicians to help ward off legal issues that could threaten the company.

Police investigators have reportedly found audio recordings in Boss Paul’s phone suspected to be his conversations with corrupt officials.