- Qoo10’s Korean units investigated for $123 million in delayed merchant payments.
- Aggressive acquisition strategy leads to liquidity crisis.
- Partners and banks react swiftly, highlighting e-commerce market’s fragility.
Singaporean e-commerce firm Qoo10 is facing heat in South Korea. The country’s Fair Trade Commission has launched an investigation into two of Qoo10’s major South Korean platforms, Ticket Monster (TMON) and WeMakePrice, for failing to pay out funds to merchants.
Approximately 60,000 merchants are owed a staggering $123 million, highlighting the precarious state of the highly competitive Korean e-commerce market.
Acquisition spree backfires
Qoo10’s aggressive expansion strategy, which included acquiring several underperforming e-commerce platforms, appears to have backfired.
The company’s recent acquisitions of WeMakePrice, TMON, InterPark Commerce, and others were aimed at strengthening its market presence and preparing for a Nasdaq IPO.
However, these moves have led to financial burdens and operational challenges, culminating in the current liquidity crisis.
Ripple effects in the ecosystem
The payment delays have triggered a swift reaction from partners and financial institutions.
InterPark Triple has ceased selling travel products on the platforms, and South Korean banks have temporarily halted loan services to TMON and WeMakePrice.
This situation underscores the delicate balance in South Korea’s e-commerce landscape, where even major players struggle for profitability amidst fierce competition.
