Seoul to help vendors hit by payment delays at Qoo10 platforms

South Korea will provide US$400 million (S$537 million) in financial support to small businesses hit by payment delays at two Qoo10 e-commerce platforms, while the Singapore-based firm’s founder pledged to use his own assets to help compensate customers and vendors.

Seoul-based TMON and WeMakePrice on July 29 filed for corporate rehabilitation in the Seoul Bankruptcy Court, Yonhap news agency reported, after failing to make payments to merchants using their platforms since early July, with Qoo10 saying the problem was triggered by a glitch in its payment system.

The payment delays have prompted the South Korean financial authorities to launch an investigation, some vendors to cut ties and long lines of customers at offices of both platforms last week demanding refunds.

Missed payments by the e-commerce platforms have grown to around 210 billion won (S$204 million), the government estimates.

The South Korean financial authorities said on July 29 that they will provide low-interest loans for affected small businesses, as well as extensions on repayments of existing loans and on tax payments.