Customers who went to the TMON headquarters for refunds waiting in line on July 26, 2024. - Reuters
SEOUL: South Korea's financial authorities will provide at least 560 billion won (US$404.55 million) of liquidity support to small businesses hit by recent payment delays by e-commerce platforms, the finance ministry said on Monday (July 29).
Last week, South Korean authorities launched an investigation into TMON and WeMakePrice, owned by Singapore-based Qoo10, after the Seoul-based e-commerce firms failed to make payments to vendors.
"The government will utilise all available resources to minimise damage," vice finance minister Kim Beok-seok said.
The responsibility lies with the e-commerce platforms, but the government cannot just watch the situation, Kim said.
The measures will mostly be through policy loans of low interest rates for small businesses and include extensions for repayments of existing loans as well as tax payments, according to the ministry.
On Saturday, TMON and WeMakePrice said that they were making efforts to minimise damage to customers and actively notifying them of ways to cancel credit card payments.
Lines of anxious customers had gathered outside the offices of TMON and WeMakePrice in Seoul last week.
Ku Young-bae, the South Korean founder of Singapore-based Qoo10, apologised on Monday over the payment delays and said he was making various efforts to remedy the situation.
Missed payments by the e-commerce platforms have accumulated to around 210 billion won, the government estimates.
Qoo10 said it was difficult to estimate the impact on vendors, while citing customer damage of around 50 billion won.
The company has told financial authorities it would secure $50 million to remedy the situation, but no detailed plan has been submitted, the Financial Services Commission said on Sunday.
Qoo10, which also has operations in Japan, China, Hong Kong, Malaysia and Indonesia, was founded in 2010 by Ku. He also founded South Korean e-commerce platform Gmarket, which was sold to eBay in 2009. - Reuters
