Recently, sellers of TMON and WeMakePrice, two Korean subsidiaries of Singapore-headquartered ecommerce group Qoo10, have been experiencing delays receiving their sales proceeds.
It is estimated that the monthly turnover of the two platforms is more than 1 trillion Korean Won (US$722 million). Many sellers have not received proceeds for transactions that took place in May.
TMON, who is popular for its travel bookings in Korea, told sellers that the company was not settling the proceeds because of some ‘internal circumstances’.
The problem seems to be getting more serious and is appearing in many headlines in Korea today.
Korea’s Finance Minister Choi Sang-mok held an emerging teleconference with officials, where he called for closed scrutiny of the situation and ‘all-out efforts’ to prevent damage to sellers and customers.
The Korea Fair Trade Commission launched an on-site investigation into Qoo10’s Korean headquarters recently, according to Korea’s Yonhap news agency.
Meanwhile, large retailers including Lotte Shopping and Hyundai Department Store suspended sales on TMON and WeMakePrice, while major travel agents also stopped selling packages on the platforms and advised customers to ask for refunds.
Qoo10 group CEO Ku Yong-bae also reportedly returned to Korea a week ago to try to solve the situation with executives of TMON and WeMakePrice.
Qoo10 was one of the earliest ecommerce platforms in Singapore, but over the years have been eclipsed by Shopee, while higher-end customers in the country were tapped by Lazada and Amazon.
The company made headlines in March this year by announcing it would acquire cross-border ecommerce platform Wish. The reported price tag of US$173 million was 44% above Wish’s trading price but 99% lower than its IPO valuation of December 2019.
Aside from Wish, TMON and WeMakePrice, Qoo10 group also owns (mainly through acquisition) Indian marketplace Shopclues (acquired in 2019), Korea’s Interpark Commerce (acquired in 2023), and logistics arm Qxpress (eclipsed by ShopeeXpress, J&T Express and others).
Qoo10’s holding company had a cumulative loss of S$418 million (US$311 million) in 2021, the last time it filed for its annual returns.
We wrote in a commentary in February this year that Qoo10 would have a possibility to make Wish work in the US (think about eBay and Etsy). However, it might take substantial effort to find a profitable niche – because Temu is already very established in the US market.
Temu is already doing very well in Korea, alongside Alibaba’s cross border arm AliExpress. The troubles at TMON and WeMakePrice, even if they do not bring down the Qoo10 group, would be an opportunity for the Chinese players, as well as local leader Coupang, according to an industry friend of Momentum Works from Korea.
