In the late 1980s, JAPAN LIFE began selling an illegal multi-level marketing In China. In 1990, AVON, limited partnership company China with US, launched their business. After their success, many foreign companies branched out China of variety form. It made China’s domestic companies also begin to participate in the competition. Because of this, illegal multi-level marketing was expanding. The Chinese government regarding it as social problem so, they released “multi-level management Act”which prohibit and allow for some company. In 2005, “Direct Sales Management Act”and “Anti Pyramid Scheme Act”was released by China’s State Council. It made a rule and served legal basis for field of direct selling. Direct Selling is one of many kinds of bussiness form. But, As direct Selling has been introduced not long the China, few customer have awareness and the ability to distinguish between direct sales and pyramid scheme. In China, Direct Selling and the Pyramid was strictly defined and distinguished entirely different kind of selling. Direct sales is defined “Direct Sales Act article 3”, “Direct Sales Act article 24 of chapter 4”and Pyramid selling is “Anti pyramid scheme ACT article 2”.