(Bloomberg) — The Korea Fair Trade Commission has launched an emergency inspection after an online marketplace run by KKR-backed Qoo10 fell behind on payments to sellers and consumers in South Korea.
The FTC is reviewing how to address the payment “incidents” that have occurred with TMON and WeMakePrice, and will be conducting emergency on-site inspections to ensure that consumers are receiving refunds and that the companies are following through on their contracts. It will also be setting up a dedicated response team to deal with the claims, according to a statement on Thursday.
Qoo10's South Korean arm has been plagued by payment delays, leaving it owed about 170 billion won ($123 million) in transactions to sellers, said Lee Se-hoon, senior first vice governor of the Financial Supervisory Service, prompting sellers to withhold deliveries and sparking a flood of refund requests from consumers.
Retailers and consumers have vented their frustration on social media, with some payment processors suspending services to both platforms, according to local media reports.
“We are fully aware of the concerns raised regarding payment delays by Qoo10's Korean subsidiary,” said Qoo10 spokesman Sam Tu. The company said it had set up a dedicated communication channel to address the concerns and was working closely with relevant financial institutions to restore normal operations.
According to local media, travel agencies registered with both platforms have also been notifying consumers of cancellations after not receiving payments for package tours they sold.
A spokesman for a domestic credit card issuer said they process refund requests from consumers as soon as they are received, but added that refunds must be made by payment processors, who act as an intermediary between credit card companies and consumers.
Singapore-based Qoo10 has been aggressively expanding its presence in South Korea by acquiring local platforms since 2022. According to a report by Mirae Asset Securities, its three Korean subsidiaries – TMON, WeMakePrice and Interpark – handle around 7 trillion won worth of transactions annually.
–With assistance from Yoolim Lee and Olivia Poh.
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