[Reporter’s Notebook] Koo Youngbae Still Trapped in the Dream of ‘Gmarket Success’

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At 4:30 p.m. on the 30th of last month, in front of Room 604 of the National Assembly Main Building, reporters swarmed around Koo Young-bae, CEO of Qoo10, as he came out into the hallway during a recess in the National Assembly's Political Affairs Committee session questioning TMON and WEMAKEPRICE (Timep). Throughout the 15-minute recess, he repeatedly waved his hands in the air before the press, saying, "If you give me six months, I can definitely normalize the business. My business direction was not wrong." His expression was filled with a deep sense of injustice.

CEO Koo has yet to wake from the dream of Gmarket's 2006 Nasdaq listing. He founded Gmarket in 2003 and was the pioneer who introduced the open market model to Korea for the first time. The business flourished, and he received much praise from those around him. Even now, under investigation by prosecutors for charges of fraud, embezzlement, and breach of trust, he is confident that he can make Qoo10 successful once again using the same methods he achieved in the past. CEO Koo repeatedly said, "The listing of Qxpress is crucial. Once listed and capital is secured, we can grow TMON and WEMAKEPRICE into companies that compete with Alibaba,” he said.

Not all of CEO Koo’s claims are baseless. If the unsettled payment crisis had been prevented last month and if they had endured just six more months, the situation might have changed as he said.

His management strategy was to acquire struggling e-commerce companies like TMON and WEMAKEPRICE and attract sellers by offering benefits close to negative margins, thereby increasing scale. TMON’s commission rate is 8-9%, and WEMAKEPRICE’s is 9.9%. Compared to the average commission rate of 15% for domestic online shopping malls, these are among the lowest rates. Instead, the company operated by leveraging the industry’s longest settlement period of 70 days to manage sales proceeds.

He believed that by growing the scale this way, Qoo10’s logistics company, Qxpress, could be listed on Nasdaq. In fact, Coupang has successfully listed on Nasdaq with a scale-up strategy that accepts losses and has dominated the domestic e-commerce market.

In the National Assembly hallway, CEO Koo told reporters, “Coupang, Alibaba, and Amazon all fundamentally originated from the Gmarket I created.” Management experts analyze that he is caught in confirmation bias, intoxicated by past glory and convinced that he cannot fail.

Professor Seo Yong-gu of Sookmyung Women’s University said, "It’s like a former Olympic gold medalist mistakenly believing they can still beat young athletes today," adding, "He ignored the fact that the market competition structure has completely changed with the emergence of Chinese e-commerce companies like Ali and Temu."

A source familiar with Qoo10’s internal affairs said, "CEO Koo saw opportunities in the domestic e-commerce market, which grew more than 20% annually during the COVID-19 period, but ignored the fact that the market entered a stagnation phase after the endemic," adding, "Various discussions about domestic and international market changes were raised internally, but the management, including CEO Koo, did not listen."

Among the first generation of successful domestic venture companies, there are many cases of failure caused by stubbornly adhering to the initial success formula and practicing autocratic management. CEO Koo is no exception. Instead of adapting and evolving in a rapidly changing market, he rigidly insisted on outdated management methods, leading to business collapse and causing damage to the national economy?a scenario being witnessed again with Timep.

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