Club Factory Raises $100 Mn To Bolster Open Platform Ecommerce Strategy For India

Chinese ecommerce giant Club Factory has announced a $100 Mn Series D funding round led by venture capital firm Qiming Venture Partners, with participation from Bertelsmann, IDG Capital, and other Fortune 500 companies from USA and Asia.

In its press statement, the company said that it would be focussing heavily on expanding its open ecommerce platform for the Indian market, which it says is a major focus behin Club Factory’s growth in India. The company claims to be the third largest e-commerce shopping app in India, after Amazon and Flipkart.

The ecommerce company, which also competes with fellow Chinese company Shein in India, attributed its India growth to the zero-commission strategy, where sellers are able to transfer cost benefits to consumers. Club Factory claims to have achieved more than 10x growth in the past six months for its Indian SME business.

Club Factory founder and CEO Vincent Lou said the 0% commission strategy has made the marketplace more democractic, letting any legally qualified Indian seller to sell on the platform. “We have also pioneered to strengthen the “store-within-platform” concept in India’s e-commerce industry, allowing direct contact between buyers and sellers through our application. We have changed the status of the Indian e-commerce industry that monopolized information of buyers and sellers, allowing SMEs to own their customers and run their business better,” Lou added.

Club Factory says it would further enhance its open platform strategy with the round of funding, expanding its products portfolio to deliver more across different categories. It’s also looking to draw in more local sellers since that underpins its strategy for India.

The funding round comes after months of controversy around the likes of Club Factory and Shein, who were accused of dodging India’s customs duty rules by disguising user orders as gifts. Customs officials in Mumbai, Chennai, Bengaluru and Hyderabad stopped parcels of Shein and Club Factory from entering the country from early this year with the crackdown continuing till August.

A seizure order by the customs department in July showed that a Shein warehouse was sealed in Mumbai after official found it undervaluing and wrongly declaring goods.

In July, Club Factory had announced that it would add over 10K sellers in India this year, and has plans to set up new offices in Bengaluru and Mumbai too. The company claimed India is its largest market with 40 Mn of its 70 Mn global users based in the country.