The company claims to follow an ‘open-platform strategy’— one that allows direct contact between buyers and sellers, while facilitating any legally qualified seller to trade on the platform.
Club Factory on Friday said it raised $100 million in funding, led by Qiming Venture Partners. The investment, part of the Series-D round of financing, also saw participation of top investors like Bertelsmann, IDG Capital and a clutch of Fortune 500 companies from the US and Asia.
The China-based e-commerce firm will use the funds to bolster its India operations. Bulk of the funds will be spent on expanding its product offerings across categories and strengthen its platform. The company claims to follow an ‘open-platform strategy’— one that allows direct contact between buyers and sellers, while facilitating any legally qualified seller to trade on the platform. Club Factory charges zero commission from sellers. “Global markets, especially India, have become a major focus of attention for Club Factory,” the firm said.
In the past few months, e-commerce majors Amazon and Flipkart have come under fire from trade bodies for extending benefits to preferred big sellers on their platforms and flouting norms, prompting the government to notify revised foreign direct investment (FDI) rules in e-commerce in December 2018. “The rapid growth of Club Factory in the Indian market is primarily due to its zero-commission strategy, where the sellers are able to transfer the cost-benefit to the users,” the company said.
The firmhas raised over $200 million in funding so far, reveals Crunchbase data . The firm that said it went past Snapdeal to rank among the third -largest e-commerce shopping apps in India, next to Amazon and Flipkart, claims to have achieved over 10 times growth in the past six months for its Indian SME business.It has cited data by App Annie.
“..our strategy to reduce the transaction costs of buyers and sellers and allow more local players to enter the ecosystem has worked very well for us in India,” said Vincent Lou, founder and CEO of Club Factory. In a recent interview to a local news agency, Lou had said about 70% of the firm’s orders are processed by Indian SMEs.