Club Factory to continue its zero commission policy in India, says Founder-CEO Vincent Lou

In the dynamic world of retail where consumer preferences are fast-changing, it is important to be always in sync with the trends. Club Factory, an ecommerce marketplace headquartered in China, has carved a niche for itself in the India market since its launch in 2016.

Adopting a strategy of zero commission policy from sellers on its platform with price-competitive products, Club Factory claims it has become the third-largest shopping app in terms of monthly active users (MAUs) in India since this June.

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Vincent Lou, Founder and CEO, Club Factory, in an email interaction with YourStory talks about the company’s plans for India where it plans to invest in infrastructure and technology to make online shopping a more personalised experience.

YourStory: What are the plans for India with Club Factory’s recent $100 million funding?

Vincent Lou: The recent funding by leading venture capital firm Qiming Venture Partners and other top investors including Bertelsmann, IDG Capital, and other Fortune 500 companies from the US and Asia, will help us expand our platform by adding and attracting more sellers.

We also aim to enhance our platform by expanding a range of products to deliver more offerings across different categories and enhance our data technology capabilities in India. Through all this, our endeavour is to make Indian retail more efficient.

YS: What is the USP of Club Factory in India’s ecommerce market considering the formidable competition?

VL: Club Factory is the only ecommerce player in India that does not charge any commission fee from sellers, which essentially means that sellers can achieve 20-30 percent cost savings when selling on our platform.

We have been providing sellers with a level-playing field to operate and they are able to transfer cost-benefit to the users. We have not only exempted sellers from paying any commission charges, but also made it cheaper to sell on our platform with our lower rates of payment gateway and other logistics charges.

Our goal is to provide a fair marketplace where both sellers and buyers benefit. Club Factory also conducts training and offers support for sellers on the platform.

Early in the year, we set a target to on-board 10,000 sellers in 2019 alone. We are happy to report that we are close to achieving this number. We are also making significant investments in infrastructure and technology to create a thriving ecosystem for sellers and Indian SMEs (Small and Medium Enterprises).

We have three warehouses to meet the demand for quick product delivery and have just opened a new warehouse in Mumbai.

YS: What has been the growth recorded by Club Factory in India since the company launched its operations?

VL: Club Factory started its India operations in 2016. We have our office in Gurugram to ensure seamless operation in this market and our local employees’ headcount has doubled every three months. We have three warehouses in India and recently launched a fourth one.

Soon after we entered India, we gained popularity for offering unique, modern, and trendy products at the most affordable prices. The positive word of mouth helped us in quickly scaling up here.

Recently, Club Factory has become the most installed app worldwide on Google Play Store in the Shopping Category in September 2019 (according to app download estimates from Sensor Tower’s Store Intelligence platform). Also, Club Factory has surpassed Snapdeal to become the third largest shopping app (in terms of MAUs) in India since June 2019 after retaining #1 rank in Google Play Shopping App category (according to data analytics platform App Annie).

We have achieved more than 10 times growth in the past six months for our Indian SME business. This success is a testimony to our vision, where we are looking forward to an era of FAC (Flipkart, Amazon, Club Factory) to be the future of India's ecommerce market.

YS: Will Club Factory continue with its current policy of zero commission with the sellers?

VL: Yes, that is our founding philosophy and we will abide by it. We believe that online marketplaces should act as a facilitator between buyers and sellers. Club Factory will continue to provide a level-playing field to all sellers by not charging any commission fees so that they get to increase their earnings while transferring the cost-benefit to buyers.

We have changed the status of the Indian ecommerce industry that monopolised information of buyers and sellers, allowing SMEs to own their customers and run their business better.

YS: What is the future plan of Club Factory with regard to the Indian market?

VL: Our strategy to empower local sellers, meet with the increased user demands, and offer best prices to our users has worked well for us and we will continue to focus on that going forward as well.

Very soon, we plan to open two new offices - in Bengaluru and Mumbai. We will also be hiring more local employees as we are growing very fast and local talent is key to our success in India. We are looking to make significant investments in warehousing, delivery, technology, and marketing to strengthen our presence further by scaling up operations in an endeavour to further connect with masses across the country.

To further accelerate growth, we are also looking at providing better experiences by having more warehouses and customer care agencies. We plan to add more product categories soon and will also continue to expand the existing categories to meet the increased demands of users.

Club Factory is committed to the Indian market and we have set sights on giving the Indian consumers easy access to affordable glamour at unbeatable prices. We provide users with a personalised feed and recommendations that help improve their buying experience. These tailor-made initiatives will help us serve and meet the customer needs in India.

(Edited by Saheli Sen Gupta)

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