Qoo10 "Procured Through Overseas Affiliates"
Unsettled Amounts in May Alone Reach 170 Billion Won
'Timf' Sellers "Gu Young-bae Must Be Arrested"
Regarding the unsettled payment crisis at TMON and WEMAKEPRICE, their parent company Qoo10 Group is reportedly planning to raise $50 million (approximately 70 billion KRW) next month through its overseas affiliates. However, with unsettled payments for May alone reaching 170 billion KRW, this amount is far from sufficient to resolve the situation. Consequently, concerns about a 'domino bankruptcy' are emerging among sellers on TMON and WEMAKEPRICE.
Qoo10 Plans to Raise 70 Billion KRW
On the 28th, according to financial authorities and the distribution industry, Qoo10 announced plans to raise $50 million next month through its overseas affiliate 'Wish.' This is the first time the scale and method of the planned fundraising have been disclosed.
Wish is a North American and European-based e-commerce platform that Qoo10 acquired in February for 230 billion KRW. There have been suspicions that Qoo10 used the sales proceeds from TMON and WEMAKEPRICE as acquisition funds at that time. Wish is also known to have a fragile financial structure, and specific details about the fundraising method have not been revealed.
The problem is that even if Qoo10 raises 70 billion KRW as planned, it will be difficult to settle the sales proceeds for sellers on TMON and WEMAKEPRICE. According to financial authorities, as of the 22nd, the unsettled amounts are approximately 56.5 billion KRW for 195 companies on WEMAKEPRICE and 109.7 billion KRW for 750 companies on TMON. These figures only account for unsettled payments from May, and the amounts for June and July could increase exponentially.
Sellers Fear Domino Bankruptcy... Demand Travel Ban on Koo Young-bae
About 50 sellers on TMON and WEMAKEPRICE held a strategy meeting at an office near Yeoksam Station in Seoul, urging investigations and countermeasures regarding the crisis. Around 1,000 sellers with unsettled payments are voicing their concerns collectively in a group chat.
The sellers estimate that the total unsettled payments from May to July will exceed 1 trillion KRW, stating, "To avoid bankruptcy, immediate layoffs of employees are inevitable. Not only our lives but also those of the employees and their dependents are collapsing."
They also called for an investigation into Koo Young-bae, CEO of Qoo10, the parent company responsible for the crisis. The sellers emphasized, "CEO Koo Young-bae and company executives must be immediately banned from leaving the country and subjected to detention and investigation."
While it is difficult to estimate the total unsettled amount, some sellers are reported to be owed from a minimum of 20 million KRW to as much as 7 billion KRW this month alone. The financial situation is particularly severe for small-scale sellers in high-value categories such as electronics and travel.
Many small sellers with tight cash flow have been covering immediate funding needs through advance payment loans, raising concerns about domino bankruptcies. Advance payment loans allow e-commerce platform sellers to receive sales proceeds from banks in advance, with the banks automatically collecting the payments from the platform on the settlement date.
Wish, China, Equity Sale... All Uncertain
Although Qoo10 has expressed its intention to secure funds through Wish, no concrete plans have been disclosed. Wish’s fragile financial structure makes it uncertain whether the fundraising will materialize. Various scenarios for securing funds have been proposed, but all remain uncertain.
Besides raising resources through Wish, there are rumors of a 60 billion KRW financial support from China. Kwon Do-wan, head of TMON’s operations division, reportedly responded that they are trying to secure a loan backed by 60 billion KRW in Chinese funds for the victims. On the 25th, Ryu Hwa-hyun, co-CEO of WEMAKEPRICE, also mentioned, "I understand that Qoo10 is considering obtaining loans through collateral."
However, the rumor of 60 billion KRW Chinese financial support lacks credibility. It is unclear whether such funds exist in China, and neither CEO Koo nor Qoo10 has provided any direct explanation regarding this matter.
Another option is attracting external investment. If Qoo10 seeks investment, it is likely to sell or pledge shares of its logistics affiliate Qxpress, which is preparing for a NASDAQ listing. The problem is that if CEO Koo offers additional Qoo10 shares, his management control could be threatened. It is known that during the acquisition of WEMAKEPRICE and TMON through share exchanges, Qoo10’s shareholding dropped to around 50%.
Meanwhile, the whereabouts of CEO Koo, the ultimate person responsible, remain unknown. He has not appeared publicly since the crisis began. The only communication was a text message to some media outlets stating, "We are working to resolve the situation. Securing funds is difficult."
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