In a dramatic turn of events, South Korea is stepping in with a whopping $400 million to rescue small businesses left reeling from a colossal payment failure on two Qoo10 e-commerce platforms. The glitch, which started in early July, has snowballed into a major financial crisis, with TMON and WeMakePrice filing for corporate rehabilitation on Monday.
The payment glitch on Qoo10, triggered by a mysterious system failure, has sparked an uproar. South Korean financial authorities are now scrambling to provide low-interest loans and extensions on existing loans and tax payments to affected businesses. Vice Finance Minister Kim Beom-seok assured the public, “The government will utilise all available resources to minimise the damage.”
The payment delays, which have ballooned to an estimated 210 billion won ($152 million), have led to long lines of angry customers demanding refunds at TMON and WeMakePrice offices. Vendors, some facing layoffs and potential bankruptcy, are cutting ties with the platforms. In response, South Korea’s prosecutor general has ordered a dedicated team to investigate the case.
Ku Young-bae, founder and CEO of Qoo10, has stepped forward with a dramatic promise to secure emergency funds. “I will sell or use my entire stake in Qoo10, which is most of my assets, as collateral and use it to resolve this situation,” he vowed. However, the company has yet to present a detailed plan to the authorities, despite aiming to secure $50 million to address the issue.
The crisis has not only affected South Korean operations but also casts a shadow over Qoo10’s international ventures in Japan, North America, China, Hong Kong, Malaysia, and Indonesia. With the company’s reputation on the line, the unfolding situation serves as a stark reminder of the vulnerabilities within the e-commerce ecosystem.
As the story develops, all eyes are on Qoo10 and South Korean authorities to see how they navigate this unprecedented e-commerce debacle.
(Source: Korea Herald | TechCrunch | Korea Times)
