10 Billion KRW Initial Investment Completed
Subscription of Convertible Bond Conversion Letters from Tmon and Wemakeprice Sellers for Unsettled Payments
"Merged Corporation Aims for Sellers to Be Largest Shareholders"
Ku Young-bae, CEO of Qoo10, has initiated procedures for the merger of TMON and WEMAKEPRICE. Qoo10 announced on the 9th that it has applied to establish a new corporation called 'KCCW (K-Commerce Center for World)' as a platform for merging TMON and WEMAKEPRICE, and will initially invest 999,999,900 KRW as the establishment capital. Since the merger of TMON and WEMAKEPRICE requires court approval, the plan is to first establish the new corporation and then proceed with preparations for the merger and business normalization centered around KCCW.
First, Qoo10 will reduce its holdings in TMON and WEMAKEPRICE by 100% with the consent of stakeholders, and CEO Ku will place his entire 38% stake in Qoo10 into a blind trust for the merged corporation. Through this, KCCW will control the entire Qoo10 Group, expanding into a global commerce platform that encompasses Qoo10's Asian market, Wish's US and European markets, and ShopClues' Indian market. KCCW has established a short-term business strategy to grow as a global platform for K-Beauty based on Qoo10's successful experience in the Japanese market.
Koo Young-bae, CEO of Qoo10 Group, is attending an emergency inquiry related to the 'Timon and Wemakeprice settlement and refund delay incident' held at the National Assembly's Political Affairs Committee on the 30th. Photo by Hyunmin Kim kimhyun81@
The merged corporation will involve sellers participating as a shareholder cooperative. Sellers will become the primary shareholders and directly participate in the board and management. This is claimed to create a new e-commerce platform where sellers, the platform, and customers all win. Since sellers participate as shareholders, KCCW will introduce and operate seller-centric commission and settlement policies. It will also promote the establishment of a fast and secure settlement system that significantly shortens the settlement period to within 7 days after delivery completion.
Qoo10 also stated that it will actively pursue capital attraction. They argue that minimizing the scale of damage through rapid business normalization and securing additional funds based on this is essential for complete damage recovery. To this end, KCCW plans to simultaneously proceed with seller shareholder cooperative formation, court merger approval requests, and negotiations with new investors while preparing for site brand changes, new openings, and the establishment of a new settlement system.
Starting from the 9th, KCCW began accepting letters of intent for CB (convertible bond) conversion of unsettled payments from TMON and WEMAKEPRICE sellers. After forming the first shareholder cooperative with sellers recruited by the end of August, they plan to request court approval for the merger. Once the merger is approved, the second and third shareholder cooperatives will be formed sequentially. CEO Ku stated, “It is difficult to recover damages by selling TMON or WEMAKEPRICE. Merging the two companies will raise the business scale to fourth place domestically. Through the merger, we must boldly reduce costs, restructure the business focusing on profitability, and quickly normalize operations. Reviving corporate value in this way will enable investment or M&A and allow the use of shares for damage recovery.”
However, whether CEO Ku and Qoo10’s plan can be realized remains uncertain. The proposal to give shares of the merged company instead of payments to affected sellers in order to save the company is analyzed as unlikely to gain agreement from sellers who are currently facing imminent bankruptcy.
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