Club Factory says orders up 100%, Indian SMEs fulfil 70% orders

China-headquartered ecommerce portal Club Factory announced that the order volume for the company has increased by 100%, and 70% of orders are being executed by Indian small and medium enterprises (SMEs). 

It is the first time the company has cleared its position on business structure, number of sellers and source of discounts.

“Currently, 70% of our orders are executed from India 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 the beginning of this year,” said Vincent Lou, CEO, Club Factory, in a statement. 

The statement from Club Factory comes months after it temporarily suspended operations due to the government’s crackdown on goods sourced from China through the gift route.

The company, which depended on cross-border sourcing primarily for selling at competitive prices, recently saw volume decline by almost a third. This was attributed to the government crackdown on the misuse of the gift route to avoid paying customs duties.  

Club Factory has restructured its India business by on-boarding local sellers. The move is expected to help it comply with norms in Press Note 2 released by the department for promotion of industry and internal trade (DPIIT). 

Press Note 2, which came into effect on February 1, specifies that a single seller cannot contribute to more than 25% of the sales on a platform. 

Until recently, Globemax Commerce was the primary seller on Club Factory.

The company, which mainly sells budget apparel, accessories and lifestyle products to customers in tier-2 and beyond, announced in July that it will be on-boarding 10,000 sellers for 2019.

The company also announced the opening of a warehouse in Mumbai to meet consumer demand and said its marketing fee waiver and zero commission programme for the sellers helped companies pass on the benefit to consumers through discounts.