WeMakePrice fires latest salvo in e-commerce price war
Money-losing WeMakePrice is cutting commissions as a price war heats up in the e-commerce market.
It is charging open market sellers 2.9 percent, the company said Wednesday.
WeMakePrice has been charging different commissions to different sellers depending on goods sold, which is standard practice for most open platforms.
The average commission on open market platforms varies from 15.4 percent for men’s casual fashion to 11.6 percent for books, according to data from the Fair Trade Commission in December.
Naver charges 3.74 percent if the payment is made via a credit card and an extra 2 percent to sellers that wish to get better page placement.
“Since there are lots of sellers on Naver, the 2 percent charge is almost compulsory for sellers if they want their products to be exposed to consumers,” said a spokesperson for WeMakePrice.
E-commerce companies have been beating each other up as they fight for market share. Coupang has offered free delivery, Emart a low-price guarantee, TMON negative commissions, Naver faster payments to merchants and Lotte Mart more loyalty points. Market Kurly is putting items on sale, but has not issued a low-price guarantee.
The goal of WeMakePrice’s commission cut is to diversify the range of goods sold on its platform by attracting more sellers.
WeMakePrice will charge either an extra 2 percent or 5 percent commission rate if sellers take part in a promotional deal, where products are offered at a lower price. The rate is different for different promotions.
WeMakePrice “will strengthen its platform function to grow with more partners and provide a more diverse range of goods to consumers,” said the spokesperson, adding that lowering the commission would be a good strategy in a long term although it may reduce the company earnings in a short term.
WeMakePrice last year generated a 60.64 billion won ($54.14 million) net loss, compared to 80.86 billion won a year earlier.
WeMakePrice has around 100,000 sellers – a quarter of Naver’s 400,000.
BY JIN MIN-JI [firstname.lastname@example.org]