A curious case of Club Factory: With clumsy consumer experience, it manages 1.5 Mn orders a month

Club Factory

Fashion has been a difficult segment in the Indian e-commerce space. Even after raising sizeable rounds, many players are still fumbling to find a firm ground amongst online shoppers.

Despite being one of the heavily funded verticals in overall e-commerce space, none of its players have been able (except Myntra) to grab a decent market share.

While local startups such as Craftsvilla, Voonik, and Roposo have pivoted to find stable grounds, Hangzhou (China)-based Club Factory seems to have gained a quick market share within two years.

Founded in October 2014, Club Factory enables customers to buy modern, trendy, and unique items at factory price in India and 25 other countries.

So far, it had amassed more than $130 million in risk capital from the likes of IDG Capital, Kunlun Capital, Bertelsmann Asia Investment, FreeS Fund, ZhenFund, and others.

About 60 per cent of its 70 million user base worldwide, hail from India, which makes it an approximate 40 million figure. Interestingly, it claims to be the third largest e-commerce company in the country.

While it’s hard to digest the latter claim made by Club Factory, it certainly beats much of local fashion focused online platforms with a decent margin.

“It does about 45,000 to 50,000 orders a day,” say two logistics partners of the firm. They requested anonymity due to their ongoing contracts with Club Factory.

According to Entrackr’s sources, Myntra does a little over 1,00,000 orders a day. LimeRoad and Voonik process about 25,000 shipments on a daily basis. Going by these numbers, Club Factory comfortably makes it to the second spot in online fashion retail.

The conflicting ground reality

“Club Factory certainly has made to top 10 e-commerce companies list but it can’t be the third largest company under any criteria”, explains one of the largest e-commerce focused logistics firms.

In India, Flipkart, Amazon, ShopClues, Snapdeal, and Myntra are considered top 5 e-commerce companies.

When Vincent Lou, co-founder, and CEO of Club Factory, was on his maiden visit to India, Entrackr had asked him about a number of transactions made over his platform. However, he chose to remain ambiguous about the matter.

When further asked about the categories that garner maximum orders, Lou mentions, “Apparel (clothing plus footwear) and lifestyle accessories generate 60 per cent of Club Factory business from India.”

Meanwhile, buying from Club Factory is nothing less than a headache for a large section of its user base in India.

Delivering wrong products, delay in shipping and returns are some of the major issues Club Factory requires to sort out if it sees India as a primary market.

“Club Factory has the worst consumer experience on several fronts. It reflects very eye catchy pictures and illustrations on product pages but the actual product, when unboxed, turns out to be very different,”  points out Satish Meena, Forecast Analyst Forrester India.

While looking at reviews and experiences of consumers with Club Factory over the Internet, majorly Quora and other communities, it was very hard to find positive feedbacks.

According to Lou, the company has been taking a slew of initiatives to address consumer concerns.  “We are ramping up our Indian team across functions such as customer care to tackle such issues,” he adds.

Club Factory has a lofty ambition in India and if it solves the existing concerns of customers, the company can create a sizeable business here.

Going forward, it would be interesting to watch how Club Factory penetrates further into the Indian market.

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