Club Factory, the e-commerce platform which is one of the 59 Chinese apps banned in India, is suspending all payment settlements for its Indian sellers till the ban continues here, according to its latest memo sent to merchants on Tuesday evening.
It has at least 30,000 registered Indian sellers. Typically, these are third-party independent sellers of smaller scale, unlike entities like Cloudtail or Tech Connect, that are one of the largest sellers on Amazon India and Flipkart, respectively. The latest development thus has created uncertainty and anxiety among the sellers. GST authorities also conducted a search on Club Factory’s Gurgaon premises, suspecting a potential tax evasion last Monday, two people aware of the matter said. The authorities reached out to its logistics partners also who deliver the goods ordered through its platform.
“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,” the e-tailer told its sellers.
A Club Factory spokesperson said, “Club Factory team is dedicated to complying with the government’s directive and is closely working with the government in order to resolve any queries they may have and submit all necessary documentation required from time to time.”
TOI first reported in its July 1 edition, saying merchants were concerned over their existing payments being stuck with the Chinese firm since the ban was imposed. The company, in its message to sellers, said it was trying to get the ban revoked. “However, given that this is a government action, the period for which such ban may be extended is presently unknown,” it added.
“Yet another marketplace has defaulted with sellers’ money. We request the government to check why RBI is not ensuring that marketplaces keep money in escrow accounts,” a spokesperson of Aiova said.
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