E-commerce marketplace for fashion and accessories Club Factory has suspended its operations in India, a fortnight after the government banned it along with 58 other apps of Chinese origin over privacy and security concerns.

Club Factory has ‘temporarily suspended’ its operations in India and put all payment settlements with sellers ‘on hold’ until such a time when the ban on its app and website are reversed by the Indian government, a mail sent to sellers which ET has reviewed, said.

“We further wish to inform you that the government notification banning the access to CF (Club Factory) app and website in India also constitutes a Force Majeure Event,” the email to sellers read, pointing to the platform’s user agreement which each seller has entered into with it.

ET had reported on July 10 that Club Factory, along with Shein and Romwe, the two other Chinese e-commerce services affected by India’s ban, had been shipping products to customers days after the government’s announcement.

These platforms had also found ways to circumvent the government’s ban on their apps and websites, having introduced different Uniform Resource Locators (URL) for their websites, with Club Factory even circumventing the ban by offering users to download its app directly from a link on its Instagram handle.

Club Factory said the Indian government’s ban on the app and website mandates a temporary suspension of business activities until the ban is lifted. “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,” it said.

Shein, in a notification on its website, alerted users that it had stopped accepting new orders from July 11, after it received a notice from the Indian government. “We are in contact with the government to respond and provide relevant documents for clarification,” the notice said.

A seller on Club Factory that ET spoke to said the company would have significant uncleared dues as it had been withholding payments from most sellers for several months before it was banned. The person could not ascertain the total amount of dues the Club Factory owes sellers on its platform.

Another source in the know of the matter told ET that Club Factory owes sellers as much as Rs 60 crore and third-party logistics providers over Rs 100 crore. Around the time it was banned, the company was only accepting cash on delivery orders and asking logistics partners to recover their dues by withholding those payments, the person added.

The ban on Club Factory, Shein and Romwe comes at a time when the Indian government is actively trying to curb imports from China, following heightened tensions between the two countries over a border row that saw 20 Indian soldiers being killed in action.

This is not the first time the Chinese e-commerce players are facing action from Indian authorities, with the customs department cracking down on them for misusing the duty-free gift channel in 2019. Club Factory and Shein have also been found to be mis-declaring the value of goods being imported into the country to evade paying the full duties.