Chinese E-commerce Innovator Club Factory Gains Traction from Indian Market
Club Factory, a Chinese e-commerce player that thrives in India, completed a new funding round worth USD 100 million. Though the marketplace concept is widely adopted in both countries, those who pay attention to existing pain points seek to make a difference.
The landscape of India's e-commerce market looks set to welcome a Chinese trailblazer.
Club Factory, the leading online platform selling products in the lifestyle, fashion, accessories, gadgets and electronics and home categories, has surpassed Snapdeal to become the third largest shopping app (in terms of MAU) in India since June 2019, after Amazon and Flipkart.
Club Factory, a Zhejiang-based e-commerce company, has become deeply involved in the Indian market. It announced that it completed a USD 100 million Series D financing in early 2019. Investors include Qiming Venture Partners and previous investors BAI and Frees Fund. Another major investor, IDG, participated from the earliest angle round in 2015 and supported the subsequent Series A and C.
Vincent Lou (李嘉伦), founder of Club Factory, believes that “only by reducing the transaction costs of buyers and sellers and allowing more Indian players to enter the ecosystem, can the company be more localized than existing players.” In this spirit, Club Factory has launched a '0% commission' e-commerce marketplace platform, and any legally qualified Indian seller can join. At the same time, the company also pioneered the concept of the store in India's e-commerce platform, allowing buyers and sellers to get in contact through the communication tool they developed via Club Factory app. This is also bringing changes to the monopoly status of Indian e-commerce in buyer-seller communications.
"Currently 70% of the orders are executed from Indian SMEs with a strong focus on products locally made in India. Also, after adopting the local marketplace strategy, the total order volume has significantly increased by over 100% since beginning of this year," Vincent added.
Amazon and Flipkart in India, who have heavy operation modes similar to JD's (China's second largest e-commerce player), pursue a close ecosystem with quality control of the supply chain. However, for a market with the second largest population in the world and the third strongest purchasing power, a more open platform to have more vendors involved will add variety into the market and make the system more dynamic. This is also the fundamental reason why Cloud Factory can develop rapidly in India.