Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
TMON initiates belated refunds as insolvency woes linger
Customers converge at the headquarters of TMON in Seoul, Friday, to receive refunds after the online shopping platform became the subject of insolvency jitters. Yonhap
By Lee Min-hyung
Whereabouts of Qoo10 founder remains unknown
TMON started offering belated refunds to customers, Friday, after more than a thousand enraged consumers flocked to the headquarters of the cash-strapped e-commerce platform.
This came shortly after WeMakePrice, another online shopping platform mired in a similar liquidity crisis, initiated refunds the day before. Early this week, concerns about the potential insolvency of both firms emerged when their sellers abandoned the platforms due to delayed payments.
Customers, particularly those who had purchased travel package products, demanded immediate refunds amid growing fears of a possible twin collapse of the two firms.
In response, government authorities took measures to minimize potential aftershocks from the latest fiasco — triggered by ill-financial management from Qoo10, the Singapore-based operator of the two online shopping platforms.
The presidential office said it has ordered the Ministry of SMEs and Startups to provide an emergency fund to support the self-employed or small business owners hit by the delayed payment from TMON and WeMakePrice.
“We let the ministry prepare for the emergency management stability fund, so it can be of help to the sellers suffering from the debacle,” an official from the presidential office said.
The office also asked relevant authorities to review countermeasures to minimize damage to sellers and customers.
The Fair Trade Commission teamed up with the Financial Supervisory Service (FSS) to calculate the exact volume of damage from the incident. Both authorities sent officials and inspectors to the headquarters of the two firms to determine if they are taking prompt actions for refunds.
A senior executive at TMON apologized for the inconvenience caused to customers, assuring them that the company will continue processing refunds individually, even if it takes some time.
Customers stand in front of the headquarters of WeMakePrice to get refunds in Seoul, Friday. Yonhap
“It looks tough for us to give refunds immediately to all customers due to our poor financial circumstances,” said Kwon Do-wan, head of TMON’s operations division.
“Because it's peak travel season, we are focusing on offering refunds, particularly on travel products that were sold.”
TMON was initially set to handle refund requests through its website, but began processing them at its headquarters in Seoul due to intense customer complaints.
According to an overnight briefing by the FSS, the two troubled firms failed to pay sellers 170 billion won ($123 million), which sparked concerns that they may end up becoming insolvent.
A note — presumed to have been written by an employee from TMON — was also found at the firm’s headquarters. It said the e-commerce firm is considering undergoing corporate rehabilitation procedures amid the lack of a control tower.
All eyes are now on the whereabouts of Qoo10 founder and CEO Ku Young-bae. Even after four days after the incident started making headlines, he has not made any public appearances. It remains unclear whether he is currently in Korea.
The Korea Consumer Agency also started initiating its collective dispute mediation on Friday. According to the agency, 4,137 telephone complaints were reported during the four days from Tuesday, when the scandal erupted.