India remains the most important markets for Chinese e-commerce player Club Factory and its operations are “completely aligned” with the country’s policy environment, the company’s founder, Vincent Lou said in an interview.
Q: What is your plan for India market for 2020?
A: India remains the most important market for Club Factory. We aim to become the leading marketplace in India and to enable the ecosystem to thrive. Very soon, we plan to open two new offices - in Bangalore 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. We will explore adding new categories on the platform and there are plans to expand our product offering across categories
Q: You talk about zero commission charges for sellers. Is that for now or do you plan to continue with this strategy?
A: 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 fee so that they get to increase their earnings while transferring the cost-benefit to buyers.
Our seller-oriented strategies have changed the status of the Indian ecommerce industry that monopolized information of buyers and sellers, allowing SMEs to own their customers and run their business better.
Q: Which states/sectors have contributed to maximum growth for you?
A: Recently, we registered over 700% growth (in terms of order volume) this Diwali as compared to last year. We have seen the highest growth in West Bengal, Bihar and Telangana with mobile phone accessories, fashion and lifestyle products emerging as the most sought-after product categories. Small and Medium Enterprise sellers continue to drive growth for Club Factory, constituting over 70% of the total seller base. More than 100 local sellers achieved a record of 15,000-plus orders per day during the Club Diwali Sale. Electronics, fashion and lifestyle is currently the most popular categories for online shopping now.
While demand from tier-II and III cities has outperformed, net increase in metro cities remains strong as people are more familiar with e-commerce shopping and the price competitiveness of Club Factory remains a major hit. We are growing rapidly along with the market demand in India. In the next few years, what we need is increased participation from the local manufacturers in order to further strengthen the e-commerce industry in India.
Q: How do you plan to take on competition from bigger players such as Amazon and Flipkart?
A: Club Factory is the only e-commerce player in India that does not charge any commission fee from sellers, which essentially means that sellers can achieve 20-30 per cent 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 the help of our lower rate of payment gateway and other logistics charges. In addition to its zero-commission model for sellers, Club Factory is not charging sellers for any marketing promotions. Our goal is to provide a fair marketplace where both the sellers and buyers are benefitted. Club Factory also conducts training and offers support for sellers on the platform.
Q: How much potential you see from India market?
A: India is the biggest market for Club Factory. We are 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 personalized feed and recommendations that help improve their buying experience.
These tailor-made initiatives will help us serve and meet the customer needs in India. Our rapid adoption in India has also made Club Factory the most downloaded shopping app on the Android platform globally in the months of September and October 2019, according to Sensor Tower’s Store Intelligence platform.
Club Factory has also surpassed Snapdeal to become the 3rd 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).
Early in the year, we set a target to on-board 10,000 sellers in 2019 alone. We are happy to report that we have achieved 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).
Q: What’s your take on the new e-commerce policy? A:
The Indian government is looking to protect the rights of sellers and buyers and build a healthy e-commerce ecosystem via the new policy. We are completely aligned with this policy and believe in facilitating a robust ecology that benefits all and creates a level playing field. Our 0% commission policy and direct messenger functions between sellers and consumers are some key highlights of our effort and philosophy for India.