November 22, 2024

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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 the 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 Korean authorities were asking the Korean platform operators to create relief measures for the snowballing complaints made by both sellers and buyers on the platforms.

Tmon and WeMakePrice, each acquired by Qoo10 in 2022 and 2023, are in a massive cash crunch, having failed to disburse earnings owed to sellers for purchases made on their platforms since May.

With the unpaid sellers leaving the platforms, customers who have purchased products and services are having difficulty obtaining refunds.

During the consultations with the local authorities, Qoo10 reportedly suggested securing $50 million from its US affiliate Wish, an e-commerce platform it acquired for 230 billion won in February. But the authorities were said to have been skeptical about the plan, saying the amount was insufficient to resolve the situation.

According to industry estimates, the value of delayed payments stands at 170 billion won ($122 million), including 109.7 billion won for Tmon and 56.6 billion won for WeMakePrice, as of July 22.

Because the total represents the outstanding payments made in May, the actual amount could surge to cover those in June and July.

“I have heard Qoo10 has a 60 billion won fund in China,” Kwon Do-wan, head of Tmon’s operations division, told reporters at its office in southern Seoul on Saturday.

But when asked for details, he backstepped, saying, “I have heard about it, but I am not certain.”

With consumers demanding refunds on 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 to cancel or refund the payments initiated from the services on Tmon and WeMakePrice.

With Tmon and WeMakePrice focusing on compensating customers for the time being, the government is to look into providing help for small business owners who are sellers on the platforms.

Meanwhile, Qoo10 CEO Koo Young-bae has remained in the shadows amid the snowballing crisis. Koo claimed he is residing in Korea, doing what he can to resolve the situation, a local news report released Sunday showed. Yet he has not made an official appearance since the controversy arose.

Koo recently resigned from his post as the CEO of Qxpress, a logistics solution provider under Qoo10. The resignation is interpreted to be a move to separate the liquidity crisis from Qxpress, which is slated to make a stock market debut on the US Nasdaq this year.

After appointing an M&A and private equity veteran Mark Lee as its new CEO, Qxpress claimed it is “irrelevant” to the liquidation crisis of Qoo10 through a press release Saturday.

“Qxpress’ business is not directly related to the payment delays of Qoo10’s affiliates. The effect is very little as well,” the statement read.

By Im Eun-byel (silverstar@heraldcorp.com)