Timon and Wemakeprice See Sharp Increase in Users in First Half
Only Major E-commerce Showing Net Growth
Surge Attributed to Aggressive Discount Events Drawing Customers
The settlement delay issue that started at Wemakeprice, an online shopping mall operated by Qoo10 Group headquartered in Singapore, is spreading to Tmon. On the 24th, citizens are passing by the Tmon building in Gangnam-gu, Seoul. Photo by Jo Yongjun jun21@
The number of users for TMON and WEMAKEPRICE, Qoo10 affiliates that caused a large-scale settlement delay crisis, surged in the first half of this year. This contrasts with competing e-commerce platforms, which showed a gradual curve. By launching large-scale discount events and discount coupons from the beginning of the year, they significantly expanded their user base, thereby increasing the damage.
Since declaring an indefinite settlement delay last month, these platforms' user numbers have plummeted by over 90%.
According to IGAWorks Mobile Index on the 1st, TMON app's monthly active users (MAU), which was around 3.4 million at the beginning of this year, increased to 4.1 million as of last month. During the same period, WEMAKEPRICE's MAU also showed a sharp increase from 3.15 million to 4.06 million.
Both platforms showed a rapid increase in users in March and April. TMON's user count, which was 3.57 million in March, rose to 4.02 million in April, nearly 500,000 new users in just one month. WEMAKEPRICE's users increased from 3.08 million in February to 3.76 million in March, a 22% growth rate in one month.
This is interpreted as the result of conducting large-scale discount events until just before the settlement delay crisis occurred, followed by aggressively issuing coupons to customers. In fact, among major e-commerce platforms in the first half of this year, none showed as steady an increase in MAU as TMON and WEMAKEPRICE. Coupang maintained an MAU in the low 30 million range every month. Other e-commerce platforms like Gmarket and 11st also maintained a certain number of users by fluctuating monthly.
Until early last month when the settlement delay occurred, TMON not only discounted general products but also sold securities-type products such as gift certificates and cash with up to a 10% discount. Since gift certificates have the same value as cash, the usual discount rate is only 2-3%, and discounts over 5% are rare. The 10% discount rate promoted by TMON was inevitably attractive to consumers. It is believed that consumers flocked to these platforms as news of TMON's 'gift certificate hot deals' spread mainly through some online communities.
However, considering that TMON had recorded capital erosion and its financial situation had deteriorated, it is presumed that they aggressively discounted gift certificates to urgently raise funds. In effect, they raised funds from customers at an interest rate of 10%. Ultimately, as TMON entered rehabilitation procedures following the settlement delay crisis, the Happy Money gift certificates sold at a 10% discount on TMON are now at risk of becoming worthless. The issuer, Happy Money INC, also has not received settlement payments from TMON for the gift certificates.
Since last month, when the settlement delay crisis of these platforms intensified, the daily active users (DAU) of TMON and WEMAKEPRICE apps sharply declined. TMON's DAU, which was in the 1.2 million range at the beginning of last month, dropped to 440,000 by the 28th, and WEMAKEPRICE's DAU also plunged from 820,000 to 290,000.
This is due to growing anxiety as the two platforms declared indefinite settlement delays in mid-last month, and vendors began canceling orders from TMON. Additionally, payment gateway (PG) companies and simple payment providers withdrew from TMON, blocking major payment methods such as credit cards and simple payments, making purchases virtually impossible and causing app user numbers to shrink.
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