Sellers abandon Qoo10-owned TMON over non-payment

Industry

Published: 23 Jul. 2024, 18:39 Updated: 23 Jul. 2024, 19:20

Sellers abandon Qoo10-owned TMON over non-payment

A pedestrian cycles by TMON's headquarters in Gangnam District, southern Seoul, on Tuesday. [NEWS1]

Sellers on Korean e-commerce operators owned by Qoo10, a Singapore-based marketplace, have begun pulling their services after experiencing persistent difficulties withdrawing their earnings. The affected platforms include TMON, WeMakePrice and Wish+.

The withdrawal problem on TMON has led to abrupt cancellations for customers who purchased services on the platform from Monday, including those who bought travel packages or plane tickets ahead of the summer season, only to have them canceled days before departure.

TMON is commonly used in Korea by users to get discounts when booking flights, accommodation, travel packages and other related services.

Qo100 said in a press release on Tuesday that it would secure the earnings at a third-party financial institution in August to pay the sellers.

Under the previous system, payments by customers would be managed by each company and remitted to sellers, sans commission fees, on the payment date. The new system will store payments with a third party.

A message from a seller on TMON notifying a customer of the cancellation of Jeju Airline tickets sent Monday. "We received a notice from a TMON employee today that earnings will be delayed indefinitely," the message reads. [SCREEN CAPTURE]

From Monday, TMON users began receiving notifications from sellers saying they were canceling their goods or services due to “delays in payment from TMON,” according to local media reports. The sellers also instructed customers to apply for a cancellation or request refunds from the Singaporean company.

“We continued to allow users to reserve and buy tickets as we believed there to be no problems with payments. However, we received a notice from a TMON employee today that earnings will be delayed indefinitely,” read a message that notified users of their cancellation options for airline tickets bought on TMON.

It has been reported, however, that refunds were also not being carried out. The delays in processing has, in turn, induced complaints by users to the sellers. In other instances, users have had to register bank account numbers with the payment gateway — the service provider that authorizes credit card payments on e-commerce platforms — to receive refunds in three to five service days, instead of a direct cancellation of card payments.

Domestic travel agencies such as Hana Tour, Mode Tour and Yellow Balloon Tour have either deleted or halted sales for most of their travel packages on TMON and WeMakePrice.

Qoo10 founder and CEO Ku Young-bae [TMON]

The debacle comes around a week after Qoo10 apologized for, and announced, a compensation plan for the earnings withdrawal issues plaguing WeMakePrice and Wish+ on Wednesday, while denying that there were similar issues at TMON.

The Singapore-based Qoo10 also owns Interpark Commerce, and bought department store AK Plaza's online shopping platform AK Mall in March. It also bought the California-based global platform Wish in February, and operates Wish+, a combined platform for Qoo10 and Wish.

Qoo10 has not been transferring payments to sellers on some of its platforms since last year. The company on Wednesday said it aimed to clear the payment backlog by the end of July, and announced a compensation plan for sellers that includes an annualized interest rate of 10 percent on the delayed amount and discounted commission fees on Wish+ and Wish.

Qoo10 acquired e-commerce platform Wish for $173 million in February. [WISH]

A spokesperson for TMON said many sellers had pulled out from WeMakePrice after the payment issues arose, leading to an overall decrease in revenue for Qoo10-owned platforms, which subsequently imposed temporary difficulty in earnings payment on TMON. There have not been any problems reported from sellers on Interpark Commerce, he said.

“We cannot give a definite response as to when the problem will be resolved,” he added.

A representative from Qoo10 could not be reached for comment on operations for Wish. The media department head for TMON and vice president in charge of public relations had previously fielded questions for Qoo10 but have quit as of Tuesday, the spokesperson said.

Qoo10 CEO Ku Young-bae reportedly returned to Korea last Thursday and held an emergency meeting with executives of TMON and WeMakePrice to discuss solutions for the delay in deposits to sellers.

The Korea Fair Trade Commission launched an on-site investigation into Qoo10's Korean headquarters recently, according to industry insiders as cited by Yonhap on Sunday. The company was reportedly probed on allegations of violating the Act on the Consumer Protection in Electronic Commerce by either not fulfilling their reporting obligation for business data or for deceiving customers through false or misleading advertising.

BY KIM JU-YEON [kim.juyeon2@joongang.co.kr]