Seller abandons TMON owned by Qoo10 due to default on payment

A pedestrian rides a bicycle past TMON headquarters in Gangnam District, southern Seoul, on Tuesday. [NEWS1]

Merchants on South Korean e-commerce operators owned by Singapore-based marketplace Qoo10 have begun suspending services after experiencing ongoing difficulties in withdrawing revenue. Affected platforms include TMON, WeMakePrice, and Wish+.

The TMON withdrawal issue has led to sudden cancellations for customers who have purchased services on the platform since Monday, including some who had purchased travel packages and air tickets ahead of the summer season only to have them cancelled just days before departure.

TMON is often used by Korean users to receive discounts when booking air tickets, accommodation, travel packages and other related services.
Qo100 said in a press release on Tuesday that it plans to set aside the proceeds with a third-party financial institution in August to pay the sellers.
Under the previous system, payments from customers were managed by each company and the amount minus a fee was transferred to the seller on the payment date, but under the new system, the payment is held by a third party.

On Monday, a message was sent by TMON's distributor to customers informing them of the cancellation of their Jeju Air tickets. “Today, we received a notice from a TMON employee that earnings will be postponed indefinitely,” the message read. [SCREEN CAPTURE]

According to local media reports, starting on Monday, TMON users began receiving notices from merchants cancelling goods and services due to “late payments from TMON.” The merchants also instructed customers to apply for cancellations or seek refunds from the Singapore company.
“We determined that there were no issues with payments and therefore continued to allow users to book and purchase tickets. However, we were informed by a TMON employee today that revenue will be postponed indefinitely,” said the message informing users of cancellation options for tickets purchased through TMON.
However, refunds have also reportedly not been issued. Processing delays have, in turn, sparked complaints from users to merchants. In other instances, rather than directly cancelling card payments, users had to register their bank account numbers with payment gateways (service providers that accept credit card payments on e-commerce platforms) in order to receive refunds within 3-5 business days.
Domestic travel agencies such as Hana Tour, Mode Tour and Yellow Balloon Tour have removed or suspended most of the travel packages they were selling on TMON and WeMakePrice.

Koo Yong-bae, founder and CEO of Qoo10 [TMON]

The debacle came about a week after Qoo10 apologized and announced a compensation plan on Wednesday for revenue withdrawal issues plaguing WeMakePrice and Wish+, but denied having similar issues with TMON.
Singapore-based Qoo10 also owns Interpark Commerce and acquired department store AK Plaza's online shopping platform AK Mall in March. It also acquired California-based global platform Wish in February and operates Wish+, a combined platform of Qoo10 and Wish.
Qoo10 has not remitted payments to sellers on some of its platforms since last year. The company said on Wednesday it aims to clear up late payments by the end of July and announced a compensation plan for sellers that includes a 10% annual interest rate on late amounts and discounts on Wish+ and Wish fees.

Qoo10 acquired e-commerce platform Wish in February for $173 million. [WISH]

A TMON spokesman said many sellers had withdrawn from WeMakePrice after the payment issues arose, leading to an overall decline in revenue on the Qoo10-owned platform, which in turn made it temporarily difficult to pay revenue to TMON. He said no issues had been reported by Interpark Commerce sellers.
“I can't give a definite answer as to when the issue will be resolved,” he added.
A representative for Qoo10 could not be reached for comment on Wish's operations. A spokesperson said TMON's head of media and vice president of public relations, who had previously responded to Qoo10's questions, resigned as of Tuesday.
Qoo10 CEO Koo Yong-bae reportedly returned to South Korea last Thursday and held an emergency meeting with executives from TMON and WeMakePrice to discuss solutions to the delays in payments to sellers.
The Korea Fair Trade Commission recently launched an on-site investigation into Qoo10's South Korean headquarters, citing industry sources as quoted by Yonhap News Agency on Sunday. The company was reportedly being investigated for allegedly violating the Act on Consumer Protection in E-Commerce by failing to fulfill its business data reporting obligations and deceiving customers with false or misleading advertisements.

Kim Ju-young [kim.juyeon2@joongang.co.kr]