Singapore Police Investigates eCommerce Company Qoo10

Police Investigates Qoo10: Key Insights

• Payment Defaults of Marketplaces: Since the first reports of liquidity problems affecting Qoo10 and its affiliated online marketplaces TMON and WeMakePrice, merchants have turned to government officials to reclaim their payments. A police investigation has now been launched to resolve the issue.

• Customers Are Also Concerned: Qoo10 has failed to pay merchants for the products that have been sold on TMON and WeMakePrice. Now the conglomerate's logistics subsidiary Qxpress is reportedly defaulting on shipments.

The eCommerce platform Qoo10 is currently under police investigation in Singapore for failing to pay merchants. Qoo10 is based in Singapore but operates eCommerce marketplaces in South Korea, most notably TMON and WeMakePrice, which failed to pay merchants who sold their products on these platforms.

South Korean lawmakers adjusted the requirements for online marketplaces to prevent future cases like this, such as shortening the payment period and requiring companies to maintain financial reserves to ensure merchants are paid. Now, however, the Singapore Police Force is investigating the parent company of the defaulting marketplaces, Qoo10, following a complaint to the Small Claims Tribunals of the Singapore State Courts.

Logistics Subsidiary Qxpress Is Struggling too

This issue does not only affect sellers on the marketplaces in question. Qoo10's internal logistics subsidiary, Qxpress, is also facing liquidity issues that are causing operational hiccups. Qxpress was founded in 2011 to handle Qoo10's shipping. With the news of Qoo10's payment delays, Qxpress attempted to distance itself from the announcement, but it appears that customers who purchased products from affiliated sites are now also having problems receiving their shipments. 

Customers who have contacted the marketplaces and logistics providers have not received helpful feedback, but instead error notifications or auto-generated emails. Given that Qoo10 reportedly laid off 80% of its staff in mid-August, it seems increasingly unlikely that these issues will be resolved any time soon.

Sources: Channel News Asia – Chosun