Club Factory, the Chinese online retailer which claims it is the third most downloaded app after Amazon and Flipkart in the Indian context. The company has secured fresh funding of $100 million, mainly from Qiming Venture Partners. This is part of the Series D funding for the company.
Bertelsmann and IDG Capital and a few more investors have joined Qiming in this round in placing their trust in Club Factory.
Club Factory has said these funds will be deployed in expanding the product categories on its platform. The e-commerce company wants to onboard more sellers on its site and also enhance the technological capabilities.
The online retailer claims that they have, in a way, changed the way e-commerce business is operated in India. Their claim may be based on the fact that Club Factory does not change any commission from the sellers on its platform. They have tried to enlist mostly SMEs and they claim the other e-commerce companies are not very transparent about these aspects.
There is no definite information or numbers available to assess how much of an impact these have had on increasing the business on its site. Some observers claim the actual value of transactions being carried out on the Club Factory platform is not so substantial.
The e-commerce company has had its own set of problems with the Indian authorities. There were two local companies floated, Globemax Technology India and Globemax Commerce India. These were set up in order to overcome the complaint that they were shipping products to India from China calling them ‘gift’ articles. This was done to evade duties since gift articles valued below ₹5,000 are exempt from duty. Once these came into the customs enforcement wing, the local units were set up.
However, Globemax Commerce India was again in trouble as the Customs raided their warehouse and found the goods were again undervalued.
The complaint being faced by Amazon and Flipkart of acting indirectly as sellers on their platforms, may be slapped on Club Factory too.