South Korean e-commerce platforms are facing a significant crisis as payment delays trigger widespread disruption. Hundreds of irate customers have staged protests demanding refunds for canceled orders, while sellers grapple with unpaid earnings.
South Korea’s e-commerce landscape is facing a difficult situation since two major platforms, TMON and Wemakeprice, subsidiaries of Singapore-based Qoo-10, struggle with delayed payments to sellers. Both companies have failed to remit payments to sellers since May, sparking widespread outrage among merchants and consumers.
The company has initiated a partial refund process and seeks additional funding to resolve the issue and the platforms’ co-chief executive has publicly apologized and promised to rectify the situation.
The Situation’s Impact on Sellers and Businesses
- Hardest Hit: Sellers of digital gadgets and travel agencies were disproportionately affected due to the holiday season.
- Small Business Struggles: The majority of affected sellers are small and medium-sized enterprises, raising concerns about their financial stability.
Government Intervention
Facing growing public pressure, the South Korean government has launched an investigation into the e-commerce platforms. The Finance Minister has ordered on-site inspections and the establishment of a consumer response team to address the crisis.
Regulatory agencies, including the Fair Trade Commission and Financial Supervisory Service, will closely monitor the situation to prevent further harm to consumers and sellers.
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