Following Chinese app ban, Club Factory puts all seller settlements on hold

By

Isabelle Crossley

Published
Jul 15, 2020

Chinese fast fashion retailer Club Factory has put its seller payment settlements on hold in India, after the app was recently banned in the country, along with 58 other Chinese apps. 

 
Club Factory has decided to suspend payment to its Indian sellers for the duration of the ban of its fashion shopping app in India, the business announced in a letter to its merchants on July 14, TNN reported. Club Factory said that it is working to have the ban lifted for its shopping services but, as the ban was mandated by the central government, the ban could well be in place for some time.
 
“Given the government has mandated complete suspension of the business activities of CF in India in light of ban imposed by the government on the CF app, we hereby wish to inform that all settlements with sellers on the CF app and website are hereby being put on hold until the ban of the CF app and website is lifted,” Club Factory wrote in its note to its sellers, accessed by TNN.  

The Union Government decided to ban 59 Chinese apps, including Club Factory and other fashion retailers such as Shein, due to national security concerns and rising tensions with China. 

Club Factory, which has over 30,000 registered sellers in India, has also been investigated for alleged tax evasion. The business’ warehouse in Gurugram was searched by Goods and Services Tax authorities last Monday as part of an investigation into the allegations, according to sources who spoke with TNN.