Uncontrolled Qoo10 Korea Business Unit Fueled Tmon-Wemakeprice Incident

Trillion-Won Bomb Could Explode
Qoo10-Originated Settlement Delay 'Landslide'

In the early morning of the 25th, the first floor of the Wemakeprice (WEMAKEPRICE) headquarters in Samseong-dong, Gangnam-gu, Seoul, was crowded with customers seeking refunds for travel products. Starting from the previous evening, the finance team took charge of receiving customer requests on-site and processing refunds. Since approvals and refunds through the PG company (payment gateway) were blocked, they had to be handled manually. Among those present were customers who had purchased from TMON. When TMON’s headquarters in Sinsa-dong, Gangnam-gu, closed its doors, these customers rushed to Wemakeprice. However, TMON customers were unable to receive refunds at Wemakeprice. The scene that unfolded early that morning starkly illustrated the chaotic state of Qoo10’s domestic e-commerce organization. Although financially linked, the fallout from the settlement delays that began at Wemakeprice quickly spread to TMON, but the response to the situation was not unified.

The payment 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@

Industry insiders point out that Qoo10’s main focus was on expanding transaction volume by acquiring domestic e-commerce companies such as TMON and Wemakeprice, but it failed to systematically control the numerous subsidiaries scattered across Korea, which is a major cause of the current crisis. Qoo10, headquartered in Singapore, established Qoo10 Korea in 2022 after acquiring TMON and Wemakeprice. At the time of establishment, CEO Ryu Gwang-jin was in charge, but he moved to become CEO of TMON, and currently CEO Kim Hyo-jong is in charge. Both were founding members of Gmarket and worked with CEO Koo Young-bae for 20 years. Kim also served as an auditor for TMON and co-CEO of Wemakeprice. This suggests that CEO Koo managed TMON and Wemakeprice through a few close associates. Meanwhile, while the top executives moved between the two companies, employees of Qoo10 Technology, a subsidiary of the parent company Qoo10, concurrently held positions in the finance teams of TMON and Wemakeprice, resulting in a distorted organizational operation becoming routine.

This situation was the reason why Qoo10’s control function failed to operate during the process of the crisis spreading from Wemakeprice to TMON. Despite both subsidiaries being separate legal entities with weak financial structures, Qoo10 Korea was unable to respond comprehensively, exacerbating the problem. An industry insider analyzed, "The settlement delay issue at Wemakeprice broke out on the 8th of this month, so there was about two weeks to prepare before it affected TMON. In reality, Qoo10’s control function did not operate during this period, so they failed to prevent the fire from spreading."

As settlement of sales proceeds was halted, CEO Ryu Hwa-hyun of Wemakeprice publicly explained the company’s position, but CEO Ryu Gwang-jin of TMON has not made any statements and is effectively missing, which also indicates that Qoo10 as a group is failing to control its management. The settlement delay crisis has become uncontrollable. Sellers are leaving, and consumers have stopped purchasing. Additionally, PG companies that handle credit card payments have blocked approvals, effectively cutting off the cash flow. CEO Ryu Hwa-hyun of Wemakeprice said, "The situation rapidly worsened as payment gateway companies suddenly blocked approvals and refunds." Considering the e-commerce structure where payments must continuously flow through the platform for settlements to occur, it has become difficult for TMON and Wemakeprice to resolve the problem on their own. Plans to introduce a new settlement system that safely protects and disburses settlement funds by linking with a third financial institution can no longer be implemented.

The problem is that if left as is, not only the current issues but also future settlements will fail to be properly paid, causing the scale of damage to snowball. As of the end of last year, Wemakeprice’s consolidated accounts payable and unpaid amounts totaled 292.3 billion KRW. TMON, which also failed to submit its audit report last year, had accounts payable and other debts amounting to 711 billion KRW as of 2022. Combined, the amount owed by the two companies reaches approximately 1 trillion KRW. Considering that it takes about 70 days from sales occurrence to settlement for TMON and Wemakeprice, the settlement delays that surfaced earlier this month relate to sales from about two months ago. This means that settlement delays could continue to occur one after another.

On the day, CEO Ryu Hwa-hyun of Wemakeprice said, "First, we will do our best to prevent consumer damage, and second, we will do our best to prevent damage to small business owners and self-employed people," adding, "We have prepared sufficient consumer refund funds to prevent damage." He continued, "The unsettled amount to be returned to sellers from TMON and Wemakeprice combined is about 100 billion KRW, and Qoo10 has secured this," and said, "(CEO Koo Young-bae of Qoo10) will find a solution and come forward before everyone." CEO Koo, who is responsible for resolving the crisis, is expected to make a statement after finding a solution.

This content was produced with the assistance of AI translation services.