(Bloomberg) -- Online marketplaces operated by KKR-backed Qoo10 have fallen behind on payments to merchants and consumers in South Korea, prompting the nation’s Fair Trade Commission to start an emergency inspection.
The FTC is exploring ways to deal with what it described as a payment “incident” at TMON and WeMakePrice and plans to conduct on-site emergency inspections to check if consumers are getting refunds and companies are following contracts. It will also establish a dedicated response team to deal with claims, according to a Thursday statement.
The South Korean units of Qoo10 have been grappling with delays in payment and around 170 billion won ($123 million) worth of transactions to sellers are left unpaid, said Lee Se-Hoon, senior first deputy governor at the Financial Supervisory Service. That’s led merchants to withhold deliveries and sparked a flood of refund requests from consumers.
Merchants and consumers have been venting their frustration on social media, while some payment processing firms have suspended services to the two platforms, local media reported.
“We are fully aware of the concerns raised regarding payment delays by Korean affiliates of Qoo10,” said Qoo10 spokesperson Sam Too. The company has formed a dedicated communication channel to address concerns and is working closely with related financial institutions to restore normal operation, he said.
Travel agencies registered on the two platforms have been notifying consumers of cancellations as they are also not getting payments for packages they’ve sold, according to local media.
A spokesperson for a domestic credit card issuer said it was handling consumer refund requests as they’re received, but added that refunds have to be made by the payment processing companies, which act as intermediaries between credit card companies and consumers.
Singapore-based Qoo10 has been actively expanding its presence in Korea by acquiring local platforms since 2022. Its three Korean units - TMON, WeMakePrice, Interpark – handle about seven trillion won in annual transactions, according to a report by Mirae Asset Securities.
--With assistance from Yoolim Lee and Olivia Poh.
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