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A person stands in front of Tmon headquarters in southern Seoul on Sunday, amid delayed payments of Tmon and WeMakePrice under Singapore-based e-commerce company Qoo10. (Newsis) |
While the nation’s two online shopping platforms Tmon and WeMakePrice struggle with an ongoing liquidity crisis, their Singapore-based parent company, Qoo10, is said to be securing cash worth about $50 million through an overseas affiliate, according to industry sources Sunday.
The new funding scheme reportedly came as the South Korean authorities were demanding the platform operators to come up with relief measures for the snowballing complaints made by both vendors and buyers on the platforms.
Tmon and WeMakePrice, acquired by Qoo10 in 2022 and 2023, respectively, are in a massive cash crunch, having failed to disburse earnings owed to sellers for purchases made on their platforms since May. With unpaid sellers ditching the platforms, customers who have purchased products and services are experiencing difficulty obtaining refunds.
During its consultations with local authorities, Qoo10 reportedly suggested securing $50 million from US affiliate Wish, an e-commerce platform it acquired for 230 billion won ($166 million) in February.
The authorities, however, have been reportedly skeptical about the plan, saying the amount was insufficient to resolve the situation.
According to industry estimates, the value of delayed payments for the platforms stands at 170 billion won, including 109.7 billion won for Tmon and 56.6 billion won for WeMakePrice, as of July 22.
Because the total represents the still outstanding payments made in May, the actual amount could surge to cover those in June and July.
While Kwon Do-wan, head of Tmon’s operations division, mentioned Qoo10 could procure money from “a 60 billion won fund in China” on Saturday, he failed to provide details about the plan.
With consumers demanding refunds through the platforms, local payment service operators -- including Naver Financial, Kakao Pay and Toss -- and card issuers have stepped up to compensate for the damages. They have announced they will cancel or refund payments initiated via Tmon and WeMakePrice.
Recognizing that the relief measures offered so far have mostly focused on compensating customers for the time being, the government is also to look into providing help for small business owners that are vendors on the platforms.
Meanwhile, Qoo10 CEO Ku Young-bae, a South Korean national, has remained in the shadows amid the escalating crisis. Ku claimed he is residing in Korea, doing what he can to resolve the situation, a local news outlet reported Sunday. Yet he has not made an official appearance since the controversy arose.
Ku recently resigned from his post as the CEO of Qxpress, a logistics solutions provider under Qoo10, in an apparent move to distance himself from the liquidity crisis of the Korean units ahead of Qxpress' planned stock debut in the US this year.
After appointing M&A and private equity veteran Mark Lee as its new CEO, Qxpress claimed it is not directly “related” to the cash-strapped Tmon and WeMakePrice through a press release Saturday, adding that the crisis has "very little" effect on the company.
In the early 2000s, Ku set up Gmarket and nurtured it into one of the nation's top online shopping sites. He sold it to eBay for $350 million in 2009. Due to a deal condition with the US e-commerce giant that banned him from working in the industry in Korea for 10 years, he relocated to Singapore to found Qoo10 in 2010.
