Payment delays at TMON, WeMakePrice raise industrywide concerns
SEOUL, July 24 (Yonhap) -- Concerns over payment delays by WeMakePrice and TMON, South Korean affiliates of Singapore-based e-commerce platform Qoo10 Group, have been escalating, causing suspensions of product sales and refunds to customers, industry sources reported Wednesday.
Since early July, South Korean sellers on WeMakePrice and TMON have been raising alarms about delayed payments.
Despite multiple notifications from the platform operators promising to normalize the payment process, delays have persisted, allegedly due to a liquidity shortage within Qoo10 Group.
Industry experts estimate the resulting damage to be at least 100 billion won (US$72.2 million) based on settlements owed by WeMakePrice and TMON.
In response to the financial crunch, major South Korean travel agencies, including Hanatour and Modetour, have withdrawn from the platforms, followed by local department stores and home shopping malls.
Customers who have purchased flight tickets, hotels and tour packages through WeMakePrice and TMON are now receiving notices for cancellations or requests for repayment from travel agencies.
"We are continuing to settle payments for small merchants and ask larger merchants for patience," an official from Qoo10 Group said, admitting it is difficult to determine the total amount of unpaid settlements and the full extent of the damage to merchants.
Meanwhile, local payment service providers have suspended services with TMON and WeMakePrice, separate sources said.
As a result, credit card payments are not available on those platforms, as well as refunds.
At the same time, major commercial banks, including KB Kookmin Bank and Standard Chartered Bank Korea, have also decided to suspend the advance settlement lending to those platforms that have experienced delays in settling sales payments.
Advance settlement lending refers to a structure where the bank pays the sales proceeds to the merchant in advance and the bank gets the money back from the e-commerce platform later.
The banks said they took action in order to protect customers and secure financial soundness.
A total of 60,000 companies sell their products through Qoo10 Group affiliates, including WeMakePrice and TMON, which reported a combined trading volume of 6.9 trillion won in 2022.
Qoo10 Group was launched by Koo Young-bae, the founder of South Korea's major e-commerce platform GMarket, in 2010.
The company has rapidly expanded its reach by acquiring TMON in 2022, and Interpark Commerce and WeMakePrice last year.
This year, Qoo10 further extended its portfolio by purchasing North America-based e-commerce platform Wish for $173 million and AK Mall, a mid-sized Korean department store chain.
brk@yna.co.kr
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