Interpark Commerce and 11st Clash Over Settlement Amount of Over 1 Billion KRW

11st "Do Not Trust Payment Ability"

Interpark Commerce, an e-commerce platform under the Qoo10 group, and 11st are in conflict over unpaid receivables amounting to around 1 billion KRW.

According to the distribution industry on the 6th, AK Mall, operated by Interpark Commerce, has been selling products on 11st in a 'shop-in-shop' format. It is reported that there are about 1,700 participating sellers.

The issue arose following a large-scale unpaid sales proceeds settlement incident involving Tmon and Wemakeprice (Timep).

Earlier this month, 11st temporarily withheld payment of approximately 1 billion KRW in sales proceeds to AK Mall, announcing that it would settle directly with sellers due to Interpark Commerce's inability to pay.

11st explained, "Although we have to bear delayed interest payments after suspending the settlement, we decided this was a measure to protect small business owners and other sellers. We believe that the commission distribution method and other details can be negotiated with the sellers and AK Mall."

However, Interpark Commerce claims this is a breach of contract, violating the sales proceeds payment regulations specified in the 'Standard Partnership Store Entry Agreement' signed by both parties.

Timon Headquarters Building, Gangnam-gu, Seoul [Image Source=Yonhap News]

Furthermore, Interpark Commerce argues that for 11st to pay sellers directly, it would be practically impossible as Interpark Commerce would need to obtain personal information consent forms from each of the approximately 1,700 sellers.

Interpark Commerce suspects that 11st, which has tens of billions of KRW tied up from sales promotions linked with Timep, is using this as a pretext to suspend payment of sales proceeds to their company. They believe 11st intends to offset unpaid receivables from Timep with the unpaid amounts owed to Interpark Commerce.

Since the Timep incident, Interpark Commerce has faced a significant liquidity crisis as sellers have been leaving one after another, resulting in delayed settlements since the end of last month. The scale of unpaid receivables within and outside the Qoo10 group has also ballooned, exacerbating the liquidity issues.

Currently, unpaid receivables accumulated within Qoo10 affiliates amount to 65 billion KRW, with external unpaid receivables including 21 billion KRW from 11st, totaling 86 billion KRW. Among the external unpaid receivables, 13 billion KRW is tied up in credit card installment payments, the largest portion. As of the end of last month, the delayed settlement amounts are approximately 3.5 billion KRW for Interpark Shopping and 15 billion KRW for AK Mall.

Interpark Commerce stated, "If unpaid receivables are not received on time, further delays in settlements are inevitable. To minimize seller damages, cooperation from credit card companies, electronic payment gateway (PG) companies, and business partners is crucial."