WeMakePrice refunds 'in progress' as Qoo10 platforms face watchdog scrutiny

Industry

Published: 25 Jul. 2024, 14:06 Updated: 25 Jul. 2024, 19:50

WeMakePrice refunds 'in progress' as Qoo10 platforms face watchdog scrutiny

WeMakePrice co-CEO Ryu Hwa-hyun talks with customers demanding refunds at the e-commerce platform's headquarters in Gangnam District, southern Seoul, on Thursday. [YONHAP]

WeMakePrice's co-CEO promised frustrated customers refunds as the e-commerce platform and its sister marketplace, TMON, grapple with delayed payments to sellers worth over 160 billion won ($116 million).

Liquidity shortage issues within the Singapore-based Qoo10 group has led its subsidiaries WeMakePrice and TMON to withhold earnings from its sellers, which has escalated to a halt in sales and refunds on the platforms. Hundreds of panicked users swarmed WeMakePrice's headquarters from Wednesday night demanding reimbursement.

"We aim to complete refunds within the day," WeMakePrice co-CEO Ryu Hwa-hyun told local press at the platform's headquarters in Gangnam District, southern Seoul, on Thursday.

"The funds for unpaid earnings for sellers is being arranged by the Qoo10 group, not only for WeMakePrice but also TMON. We are prioritizing paying customers and small merchants," he said, adding that there are sufficient funds to cover damages owed to customers.

In response to growing concerns, Korea's financial and antitrust regulators launched a joint on-site investigation into the two Qoo10-owned platforms on Thursday.

The Financial Supervisory Service (FSS) and Fair Trade Commission (FTC) probed the company offices to gauge the exact amount of delayed payments; the current state of the exit of sellers and the refunding process for customers; and any possible violation of contracts with sellers and users.

The FSS said WeMakePrice has delayed payments amounting to 36.9 billion won to 491 sellers on the platform as of July 11.

"WeMakePrice and TMON have reported their outstanding balance at 160 billion won to 170 billion won, but the exact amount can be announced only after the inspection team's verification," FSS First Senior Deputy Governor Lee Se-hoon said at a briefing held Thursday.

Meanwhile, the FSS opened a complaint center for customers, and the FTC set up a task force at the Korea Consumer Agency to support consumer damage relief and mediate disputes. The two agencies will also establish a settlement fund management system to minimize damage to sellers.

Officials also began preparations for collective dispute resolution, and will closely monitor the situation to minimize further fallout and come up with measures if necessary, according to the FSS.

Customers wait to fill in their information for the refund process at WeMakePrice's offices on Thursday. [YONHAP]

Ryu said early Thursday that he estimated the combined outstanding earnings balance owed to sellers on WeMakePrice and TMON at 100 billion, according to Yonhap. He later changed his stance to say he only knew the owed amount by his company to be 40 billion as of last week.

He did not have a comment on the future of U.S. platform Wish, which Qoo10 acquired in March.

The marketplace executive met with frustrated customers demanding refunds at WeMakePrice’s headquarters from around midnight on Thursday.

Hundreds of customers have reportedly gone to the offices of WeMakePrice and TMON in southern Seoul to demand refunds for canceled purchases since Wednesday night. Firm employees processed the reimbursements by having the customers write their orders and bank details on paper from early Thursday morning. TMON users also swarmed the platform's headquarters, but the building was closed down, and no workers were on-site to deal with the issue.

Around 700 refunds applied for on-site have been processed, Ryu said, with an additional 600 refunds issued as of 6 p.m on Thursday for a total of 1,300.

On-site applications for refunds at WeMakePrice's offices closed at 10:30 a.m., with the rest set to be processed through the company's online customer service system, according to a notice displayed at the headquarters.

Update, July 25: Added latest developments at WeMakePrice, actions of government agencies.

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