Qoo10 cash crisis spreads to Interpark Commerce

Industry

Qoo10 cash crisis spreads to Interpark Commerce

Published: 31 Jul. 2024, 13:37 Updated: 31 Jul. 2024, 18:47

KIM JU-YEON
kim.juyeon2@joongang.co.kr

Interpark Commerce has shut down services for book sales from Wednesday amid a liquidity crunch for Qoo10 and its e-commerce affiliates TMON and WeMakePrice. [SCREEN CAPTURE]

The liquidity crunch at Qoo10 has hit yet another online marketplace in Korea — this time, Interpark Commerce — after it failed to make payments to its vendors.

The Qoo10 subsidiary, acquired for around 150 billion won ($109 million) last year, suspended book sales on its Interpark Books website and app from Wednesday as its major vendor reportedly did not receive due payment.

“We have agreed with Kyobo Book Centre, our merchant, to halt services until the unpaid earnings problem at TMON and WeMakePrice is resolved,” read a notice on Interpark Books.

The notice was later edited upon request by Kyobo Book to exclude any mention of the brand.

The bookstore reportedly did not receive Tuesday’s payments from Interpark Commerce. A spokesperson for the company told local broadcaster YTN that the damages are not large, but the decision was made to halt services given that Interpark Commerce is a Qoo10 affiliate.

“We apologize to our customers for the inconvenience,” the marketplace said in its notice, adding that the company's workforce will “try its hardest so that services can return to normal.”

Interpark Commerce shut down Interpark Shopping+, a global marketplace it operated with its parent company, Qoo10. [INTERPARK COMMERCE]

Interpark Commerce also shut down Interpark Shopping+, a global shopping platform operated with Qoo10, the same day. This comes around four months after the service was launched in late March. Purchasing will not be available from Thursday, and refunds and payment cancellations for undelivered goods will start on Aug. 12. It will completely close down on Aug. 22, according to a notice on Monday.

The retailer claimed that it will focus on stabilizing operations for its book and domestic shopping services in the announcement.

Interpark Commerce sent out a notice to its listed sellers on Monday saying payments could not be obtained for Interpark Shopping, Interpark Books and AK Mall. [SCREEN CAPTURE]

Interpark Commerce also sent out a notice to its listed sellers on Monday saying payments were delayed due to the ongoing liquidity problems at TMON and WeMakePrice.

"Interpark Shopping, Interpark Books and AK Mall have not been able to obtain payments for its sellers due to the delayed payments at TMON and WeMakePrice," the notice read.

"Payouts have been delayed due to some payment gateways suspending the transfer of pending earnings."

The online retailer will switch its payment gateway provider from TMON to a different firm, according to local reports on Wednesday.

TMON's headquarters in Gangnam District, southern Seoul remain closed on Wednesday. [YONHAP]

The nonpayment was alluded to in a parliamentary hearing on Tuesday, with Qoo10 CEO Ku Young-bae saying it was possible that there were unpaid earnings for sellers on Interpark Commerce and AK Mall, in addition to TMON and WeMakePrice. The CEO estimated the maximum funds available within the company to be 80 billion won, less than the estimated 213.4 billion won in May payments owed on the latter two e-commerce platforms.

Both companies filed for court receivership with the Seoul Bankruptcy Court on Monday.

On Wednesday, the two online platforms posted identical notices on their websites saying they aim to "normalize operations under regulatory guidance from the court and repay creditors" while alerting customers and sellers to the preservative measure and general prohibition order placed by the court on Tuesday.

Under the Debtor Rehabilitation and Bankruptcy Act, the preservative measure bans TMON and WeMakePrice from offloading assets or reimbursing creditors. The general prohibition order restricts creditors from pursuing auction procedures for compulsory execution, provisional seizure, preliminary injunction or the exercise of security rights against the two platforms.

"The court will decide whether to start rehabilitation procedures after sufficient hearings. Should the procedures start, a plan to settle debts will be drawn up in consultation with related stakeholders, for which the consent of rehabilitation creditors will be sought," the notice said.

The Qoo10 affiliates also cautioned customers to be mindful of their purchases due to potential roadblocks in the ordering, delivery and refund process.

"The apps for WeMakePrice [and TMON] are operating but the deliveries may be either delayed or impossible to fulfill and payments may be canceled. There may be difficulties in the refund process for cancellations made after the order is placed," the notice read.

"We are deeply sorry for the trouble and inconvenience caused."

Update, July 31: Added details about Interpark's activities, notice from TMON and WeMakePrice.

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