[News Inside Companies] Qoo10 Causes Settlement Delay Crisis for Tmon and Wemakeprice

The responsibility for the recent settlement delay incidents at TMON and WEMAKEPRICE ultimately falls on Qoo10, which acquired the two companies consecutively in 2022 and 2023. Since their establishment in 2010, TMON and WEMAKEPRICE have never posted an operating profit, but for nearly 15 years, they have successfully functioned as e-commerce platforms where millions of users shop every month. Even though the companies did not make money, the platform structure allowing sellers to sell goods and receive payments remained intact. Settlement is a core foundation for maintaining an e-commerce platform, but Qoo10, the parent company of the two firms, treated this lightly.

It is therefore ironic that Koo Young-bae, the founder of Qoo10, is considered a first-generation figure in Korean e-commerce. He knows better than anyone how e-commerce operates. Koo previously worked at Interpark and founded Gmarket based on an in-house venture called ‘Goosdac.’ After selling Gmarket to eBay in 2009, he established Giosis in Singapore in 2010 as a joint venture with eBay (51:49) and launched the e-commerce platform ‘Qoo10,’ focusing on Southeast Asia. This was because the Gmarket sale contract included a clause prohibiting him from competing in the same business in Korea for 10 years.

Qoo10 operates seven e-commerce platforms across five countries, including Singapore, Indonesia, Malaysia, and China. In 2019, it also acquired the Indian open market ‘ShopClues.’ Domestically, it ran a cross-border shopping business. It also established a logistics subsidiary, ‘Qxpress,’ to handle product deliveries for these shopping malls. Qxpress supports deliveries using logistics hubs in 19 locations across 11 countries.

Because of the non-compete agreement, Koo operated overseas after selling Gmarket, but he was eager to return to Korea. Once the restriction period ended, he acquired domestic companies TMON, Interpark, and WEMAKEPRICE consecutively through Qoo10. Then, in February, he acquired the global platform Wish, and in March, he purchased AK Mall, the online shopping mall of the Aekyung Group’s AK Plaza. The industry views Qoo10’s aggressive acquisition strategy as the root cause of the problems. Notably, Qoo10 paid $173 million (about 240 billion KRW) for the Wish acquisition. As Koo made consecutive acquisitions, the industry speculated that Qoo10 was pursuing this strategy to increase transaction volume in preparation for Qxpress’s Nasdaq listing.

Qoo10’s subsidiaries also grew in size. As of last month, the estimated payment amounts for TMON and WEMAKEPRICE reached 839.8 billion KRW and 308.2 billion KRW, respectively. However, the reckless moves to expand size only worsened the situation. TMON had not even submitted its audit report by the April deadline. WEMAKEPRICE recorded an operating loss exceeding 100 billion KRW last year. Although Qoo10 pursued aggressive mergers and acquisitions to expand transaction volume, a disruption in the flow of funds in one area led to a breakdown of the entire system.

Koo has said, "I will complete a ‘global e-commerce ecosystem’ connecting sellers and buyers worldwide, centered on Korea." His grand vision now faces its greatest crisis. As domestic subsidiaries TMON and WEMAKEPRICE become insolvent, Qoo10’s global goal of providing e-commerce platform services spanning the world is also shaken.