November 24, 2024

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Wemakeprice's headquarters in southern Seoul (Newsis)

Sellers are leaving Tmon and Wemakeprice, the online shopping platforms owned by Singapore-based e-commerce giant Qoo10, due to delays in payment reportedly caused by liquidity issues, according to industry sources, Wednesday.

Major retailers like Lotte Shopping, GS Retail and Hyundai Department Store suspended sales on Tmon and Wemakeprice earlier this week, citing a failures in getting paid by the two platforms. Similarly, travel agencies including Hana Tour, Modetour and Yellow Balloon Tour also halted sales of travel packages, advising consumers to apply for refunds.

"There will be no impact on travelers departing this month. But we need to monitor the situation for August departures,” said an official from a travel agency who wished to remain anonymous.

These business disruptions come as Qoo10 struggles to improve its cash flow after years of relentless acquisitions of industry rivals with the apparent goal of listing its international delivery service, Qxpress, on the New York stock market. This year alone, it acquired US e-commerce platform Wish in February and Korean online shopping mall AK Mall in March.

The profitability of Tmon and Wemakeprice, in particular, has also suffered since their acquisition in 2022 and 2023, respectively. According to regulatory filings, Tmon’s cash reserve was 8 billion won as of 2022, down from 55.5 billion won ($40 million) the previous year, whereas the impaired capital of Wemakeprice reached 239.8 billion won.

In a press release Tuesday, Tmon and Wemakeprice explained that the payment settlement delays are temporary, saying they plan to introduce a settlement system in collaboration with a third-party financial institution next month.

"We will do our best to quickly resolve settlement delays and restore the trust of sellers and customers,” they said in a statement.

Qoo10 was established in 2010 by Ku Young-bae, a Korean national who had set up Gmarket in 2003 and sold it to the US' eBay in 2009. After a 10-year hiatus from the industry in Korea, which was a contract condition of the Gmarket sale, he relocated to Singapore to found Qoo10.

By Hwang Joo-young (flylikekite@heraldcorp.com)