Homegrown ecommerce platform Qoo10 is currently being investigated by the police following complaints from local businesses about payment delays, with some frustrated vendors resorting to the Small Claims Tribunals of the State Courts to try and get their money back.
In a report published today (September 12) by CNA, vendors the publication spoke to attempted to contact the company via email, only to receive generic responses with no clear timeline provided for when payments will be made.
Several businesses, both large and small, have removed their products from the platform as payment delays persist.
One vendor, who had been using the ecommerce platform since 2014 to sell baby and maternity products, revealed that nearly two months have passed since he requested to withdraw approximately S$21,000 in sales proceeds from his Qoo10 seller account.
The withdrawal request was made on July 19, with the payment originally due on August 5. However, he said he has yet to receive the funds, and subsequent withdrawal requests have also failed to reach his bank account. Additionally, he said the platform is holding over S$11,000 of his sales proceeds in escrow, which have not been made available for withdrawal.
The government is closely monitoring developments
Signs of trouble first emerged back in July, when reports revealed that two of Qoo10’s South Korean-based platforms had defaulted on payments to local merchants and consumers.
The two platforms—TMON and WeMakePrice—filed for corporate rehabilitation in the Seoul Bankruptcy Court, and South Korean government officials estimated that both companies owed at least 213.4 billion won (US$154.2 million) to over 2,700 merchants who did not receive their May payments.
In Singapore, Mandarin news platform Channel 8 recently reported that the ecommerce platform laid off more than 80 per cent of its workforce.
90 out of 110 staff members in the city-state have allegedly been impacted by the layoffs, and they were not offered any benefits due to a lack of funds.
These issues have prompted Workers’ Party Member of Parliament Louis Chua to file a parliamentary question asking if Singapore authorities are investigating the situation.
In his response on Tuesday (September 10), Minister for Trade and Industry Gan Kim Yong confirmed that the government has received feedback from several merchants about payment delays and has brought them to Qoo10’s attention.
“We have requested that they take prompt action to resolve the delays with the affected merchants,” he stated.
“The government is also closely monitoring developments in South Korea regarding Qoo10’s subsidiaries and is in touch with Qoo10 to assess whether and how this may affect its operations in Singapore.”
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