Can't bear it anymore! Another cross-border e-commerce platform has problems, owing sellers more than 100 billion yuan

The global cross-border e-commerce industry is about to change!

Recently, some media reported that the well-known cross-border e-commerce platform Qoo10 (Qutian) announced large-scale layoffs four months after successfully acquiring Wish.

Cross-border Knowledge learned that Wish became popular with its low-priced products and was called the "American version of Pinduoduo" by people in the industry. Now, its parent company Qoo10 is in deep debt crisis, and the outside world is also worried about Wish's subsequent operations.

Qoo10 reportedly laid off a large number of employees

China has completely stopped production

According to media reports from former employees, Qoo10's large-scale layoffs due to a broken capital chain involved a wide range of people.

In the past two weeks, the cumulative layoff rate at the Singapore headquarters has exceeded 80% , and all departments have been affected. Currently, only senior management and a few employees responsible for maintaining the operation of the Qoo10 platform remain at the headquarters.

In addition, according to former employees, not only is the Singapore headquarters laying off employees, employees in the China office have also stopped working and are awaiting further notice . In the South Korean office where the main business is located, almost all functional staff have been persuaded to resign and employees cannot be paid.

To make matters worse, Qoo10 is currently facing a major financial crisis, so there are almost no layoff benefits. The company may be preparing to sell assets or even shut down all operations.

It is understood that Qoo10 is a cross-border e-commerce platform headquartered in Singapore. It was founded by Korean Gu Yongbae in 2010 and its main business is mainly in South Korea.

Gu Yongpei is a serial entrepreneur. As early as 1995, Gu Yongpei founded Interpark, an online auction and shopping website. In 2000, Gu Yongpei founded another Korean e-commerce platform, Gmarket.

In 2009, Gu Yongpei sold Gmarket to eBay at a high price, but with one condition: he would not get involved in Korean e-commerce within 10 years .

So Gu Yongpei shifted his attention to other Asian markets, and then Qoo10 was registered in Singapore.

With the expiration of the 10-year ban, Gu Yongpei returned to the Korean market. Since 2019, Qoo10 has successively acquired Korean e-commerce platforms such as Interpark, Tmon and Wemakeprice.

Regarding the specific reasons for Qoo10's layoffs, people inside and outside the industry all agree that this is closely related to the fact that two Korean e-commerce platforms under Qoo10 had previously defaulted on payments to suppliers .

In July this year, two Korean e-commerce platforms affiliated with Qoo10, TMON and WeMakePrice , were exposed to have owed sellers more than 100 billion won in payments . A Wemakeprice seller revealed that two months had passed and he had not received the payment for May. At that time, the platform responded that this was a problem with the settlement system, promised to complete the payment as soon as possible, and issued a compensation plan for delayed delivery.

However, the Wemakeprice issue has not been resolved yet, and similar problems have also emerged on Tmon's side .

According to estimates, the two platforms have a cumulative arrears of more than 1.3 trillion won (about US$978 million) , affecting 48,100 sellers.

Unable to get paid, sellers began to refuse to ship goods, and some large retailers also withdrew from the platform. Not only that, even the payment agents responsible for settlement and refunds ran away.

Qoo10, the parent company of Tmon and Wemakeprice, was also affected by this incident. At that time, it was revealed that the reason why Tmon and Wemakeprice delayed payment was because Qoo10 transferred all the money .

We have no way of knowing whether the revelations are true, but it is well known that Qoo10 is in deep financial crisis .

Acquired Wish half a year ago

The parent company's debt crisis has caused concerns

Another chain of concerns that has arisen is whether the subsequent operations of the newly acquired Wish will be affected.

In February this year, Qoo10 acquired Wish, the "American version of Pinduoduo", for US$173 million in cash .

Cross-border Knowledge learned that the acquisition price of US$173 million was 44% higher than Wish’s previous closing price, but 99% lower than its market value at the time of its IPO in December 2019 .

Wish, known as the "American version of Pinduoduo", has successfully taken root in the sinking markets in Europe and the United States with its high-quality and low-priced products from Chinese sellers.

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However, after a brief period of glory, Wish began to go downhill .

Starting from 2021, Wish's performance has reached a turning point, with annual revenue of US$2.085 billion, a year-on-year decrease of 18% from 2019. After that, Wish has almost been on a downward trend. By the third quarter of 2023, Wish was still in a loss-making state.

Wish, which has been in a state of loss for a long time, had to face the outcome of being acquired. Qoo10 wanted to integrate the resources of both parties through the acquisition of Wish to compete with cross-border e-commerce platforms such as Amazon, eBay, and AliExpress.

At this time, Qoo10 is facing another debt crisis, and it is unknown whether it can survive this time. It will take time to answer whether Wish can remain unscathed.

However, Cross-border Knowledge believes that although Wish’s current operations are relatively independent, it will inevitably be affected if its parent company encounters a crisis .