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Club Factory Banned in India – Burning Issues – Free PDF Download

59 CHINESE APPS BANNED

  • TikTok, UC Browser, and Club Factory, in a move aimed to safeguard data privacy of users.

  • GOVT ANNOUNCED ATMANIRBHAR BHARAT (JULY 12)
  • In the immediate aftermath of the ban, the government launched ‘Aatmanirbhar Bharat’ or ‘Self-Reliant India’.

BAN LACKED SCRUTINY…

  • That the ban came in the wake of clashes between the armies of both countries in Ladakh’s Galwan Valley meant that any scrutiny of the move and its possibly damaging implications was muffled by invoking the nationalist cause which it supposedly furthered.
  • Chinese ecommerce store Club Factory went rogue and suspended payments to Indian sellers, by invoking the ‘force majeure’ clause.

  • Force Majeure: unforeseeable circumstances that prevent someone from fulfilling a contract.
  • In an email sent to sellers on July 14, the company wrote that the government’s ban on Chinese apps constituted a ‘force majeure’ or unforeseeable event, thus preventing the company from fulfilling its obligations to the Indian sellers.

INDIAN SELLERS SUFFERED THE MOST….

  • Some media portals covered the issue. And that was all… Outcome: Sellers waiting on payments from Club Factory haven’t found an outlet to detail their sufferings.

SELLERS USED SOCIAL MEDIA PLATFORMS…

  • Since July, a lot of sellers have tweeted about the financial crisis that has befallen them because of Club Factory suspending payments. Others’ tweets are more worrisome, as they talk about committing suicide and blame the government for their miseries.

SOME WORRISOME COMMENTS…

  • “The Prime Minister was talking about an Aatmanirbhar Bharat. Little did we know that we’d be completely self-reliant, with no one from the government to help us in times of crisis,” says Pankaj Gaba, who used to sell Kurtis and bedsheets on Club Factory and is waiting on payments worth INR 3.31 lakhs from the Chinese ecommerce store.
  • Four Indian sellers had also sent a legal notice to the Chinese ecommerce store, their total amount in pending dues for the four sellers amounted to INR 2.58 Cr.
  • They also said that the ‘force majeure’ clause does not apply in times when the government has invoked the Disaster Management Act. 12 more sellers: Their pending dues from Club Factory collectively aggregate to around INR 2.1 Cr.

THE BIG PICTURE IS MORE WORRISOME…

  • The All India Online Vendors Association (AIOVA), which claims to represent the interests of more than 2,000 Indian sellers, hasn’t undertaken the exercise of finding out the number. “Thousands of small sellers whose dues are in lakhs of rupees (are) pending to be cleared. The total dues amount to crores of rupees,”.

DO THE SELLERS HAVE A LEGAL RECOURSE?

  • Yes…
  • Besides sending a legal notice to Club Factory within days after it suspended payments to sellers, the association, last month, also wrote a complaint to the Reserve Bank of India (RBI), claiming that by withholding payments to sellers for more than a month after the confirmation of deliveries, Club Factory had violated Section 28 of the Payments and Settlements Act, 2007.

“COUNTRY OF ORIGIN” TAG

  • Just last month, the Department for Promotion of Industry and Internal Trade (DPIIT) frequently made the news when it urged ecommerce platforms such as Amazon and Flipkart to display the ‘country of origin’ tag on products being listed on their website. Good Move: The ‘country of origin’ tag is meant to enable customers to make an informed decision, as also, to uplift Indian sellers and their products against the global competition in the market.

SAD PART FOR THE SELLERS ON CLUB FACTORY…

  • To date, no government representative has spoken on the issue. However, when ecommerce companies default on payments to these sellers, jeopardising the survival of their small enterprises, their concerns fall on deaf ears.
  • One is forced to think, is this crisis for the sellers of the government’s making itself?

 

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