🔍 Investigation Launched
South Korea's Fair Trade Commission announced an investigation into Qoo10's units, TMON and WeMakePrice, on Thursday. The probe addresses payment delays of $123M (170 billion KRW) to 60,000 merchants. These delays have resulted in a freeze on refunds to consumers. Local media report that South Korean banks halted loan services to both companies due to the cash crunch.
💼 Market Competition
South Korea's e-commerce market is highly competitive. Naver, Coupang, and SSG hold 45% of the market share as of 2022. Smaller players like Qoo10 struggle for profitability. The situation for Qoo10's units is dire, with InterPark Triple, a travel product seller, threatening to cease sales if not paid by July 25. Yanolja, InterPark Triple's parent company, has already stopped selling on TMON and WeMakePrice.
🛒 Acquisition Strategy
Qoo10's recent acquisitions are under scrutiny. It acquired WeMakePrice in April 2023, TMON in August 2022, and InterPark Commerce in March 2023. These moves were part of Qoo10's expansion strategy to strengthen market presence and prepare for a Nasdaq IPO. However, these acquisitions brought financial burdens and operational challenges, leading to the current liquidity crisis.
🏢 Company Background
Founded in 2010, Qoo10 is a joint venture between eBay and Gmarket founder Young Bae Ku. Ku, an e-commerce mogul, previously founded Gmarket in 2000. Gmarket expanded into Japan in 2007 and Singapore in 2008. After selling Gmarket's South Korean unit to eBay in 2009, it rebranded as Qoo10 in 2012. Qoo10 operates in several Asian markets, including Singapore, Japan, and Indonesia. In 2018, eBay acquired Giosis' business, including Qoo10's Japanese unit, for $573M.
How will Qoo10 resolve its payment delays to merchants?
