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FClub.cn offers limited-time discounts on brand name products

Niu Liben, CEO of FClub.cn was engaged in the distribution, sales, international trade and OEM of garment in the early stage of his career. He was the first distributor of Jack Jones on the Chinese mainland but had later surrendered the distributorship as he learnt of certain operations management issues associated with the principal company.

The rapid growth of e-commerce on the mainland in recent years has caught Niu's attention. Building on the connections he has developed over the last 10 years or so, Niu launched FClub.cn at the end of 2009. The website positioned itself as a flash sale portal that sells discounted brands within limited periods.

FClub.cn has a comprehensive supply chain. From the selection of partnering brands, purchasing and inspection of products, selling via online platform, logistics, customer service, to after-sales services and media promotion, every aspect is managed by the respective departments of the company rather than outsourcing to other parties. It has also established its own warehouse in Jinqiao District of Pudong which serves as the warehousing and logistics centres of its many manufacturing entities.

The way FClub.cn cooperates with the brands varies. FClub.cn can act as a distributor or consignee. In general, a batch of products will be sold online for five days. At the end of the five-day period, and depending on the sales performance of the products, they may decide to continue selling the products for another five days, or allow the supplier to provide products of other styles, or terminate the cooperation. Payment between FClub.cn and the suppliers will be settled after the five-day period. In addition to these regular sale schedules, special sales for specified periods, products and themes can also be organised to cater for seasonal or other celebrations and festive events (such as sports events, Children's Day, Valentine's Day and Mother's Day).

According to Niu, FClub.cn currently carries over 1,000 brand names, largely in the area of consumer products. Expensive items or items not suitable for online sale and shipment such as diamond, food, glassware and other fragile products will not be put on the website as the sales of these products are prone to disputes and the after-sales services are more complicated and tedious. Issues such as the professional certification of diamond, guarantee of food safety, and liabilities resulting from damaged glassware may arise.

Today, FClub.cn has over 500 staff and 1.6 million registered users, 30% of which reside in Beijing, Shanghai and Guangzhou. 65% of the users are females, the post-80s generation account for 62%, while university graduates take up 55% of the total. The largest customer group belongs to the middle-to-high income group that has a monthly income of Rmb5,000 to Rmb20,000, and over 90% of the customers are repeat buyers. Niu said that China lags behind foreign countries in this type of online flash sale. However, if a website only carries one single type of high-end branded product, sales may not be as desirable since the product price after discount may still be high and the group of patrons may be relatively stable. Therefore, FClub.cn has positioned itself as an online shopping portal for all kinds of branded or luxury labels. Thanks to the diversification of products, the customer base has also been broadened to cover diverse groups with varying purchasing power and to satisfy different needs. The wide range of products and the huge spread of product prices make FClub.cn more competitive than its competitors whose single focus is discounts on luxury goods.

Niu said he has plans for listing FClub.cn though the timing will depend on business development needs. Currently, the company's focus is being put on increasing customer loyalty, improving service quality of the website, and establishing its own brand as a website for discounted brands.

from Doris Huang, Shanghai Office

Content provided by Picture: HKTDC Research
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