Police investigating e-commerce platform Qoo10 over payment delays to vendors

SINGAPORE: The police are investigating Singapore-based e-commerce platform Qoo10 after local businesses were hit by payment delays, prompting some frustrated vendors to turn to a claims tribunal to seek help.
Signs of trouble emerged in July when two of Qoo10’s Seoul-based platforms failed to make payments to merchants in South Korea. The two platforms – TMON and WeMakePrice – later filed for corporate rehabilitation in the Seoul Bankruptcy Court.
South Korean financial authorities have launched an investigation.
In response to CNA’s queries, the Singapore Police Force said on Thursday (Sep 12) that reports were lodged against Qoo10 and investigations are ongoing.
Mr Liu Wei Guo, a vendor who has been using Qoo10 since 2014 to sell baby and maternity products, was among those who made a police report after payment delays dragged on.
According to Mr Liu, it usually takes two to three weeks for payment to reach him, but it has been almost two months since he asked to withdraw around S$21,000 (US$16,100) worth of sales proceeds from his Qoo10 seller account. The request was made on Jul 19 and the due date for the money to come through had been set on Aug 5.
The money from subsequent requests has also not landed in his bank account.
In addition, Mr Liu said Qoo10 is also holding in escrow more than S$11,000 worth of his sales proceeds that it has not made available for him to withdraw.
Of the 11 vendors CNA spoke to, eight confirmed that they were still waiting for the money Qoo10 owed them. Some are waiting for a few hundred dollars while others are owed thousands. 
One vendor who had been waiting for payments he requested on Aug 18 and Sep 1 was paid on Tuesday night. 
Qoo10 was one of the first e-commerce platforms in Singapore when online shopping gained popularity. 
On its website, Qoo10 describes itself as Asia’s leading online marketplace that operates in five markets in the region.
As the payment delays continue, several vendors – big and small – have pulled products from the platform.
They include popular brands such as instant beverage retailer Gold Kili. An employee said the company decided to discontinue its service on Qoo10 due to a “dispute”, although she declined to specify what the dispute was.
Fragrance, which sells bak kwa and other local snacks, has also removed products for sale on its Qoo10 page. 
“While we prefer not to comment further on Qoo10 payment matters at this time, we will continue to monitor the situation and await more information from Qoo10,” Fragrance told CNA, adding that orders that had already been placed will be fulfilled.  
An employee of Lao Ban Niang, which offers a variety of traditional Chinese medicine and foodstuff, said it had also stopped taking orders on Qoo10 due to the payment delays. 
Perhaps harder hit are smaller vendors, some of whom have turned to the Small Claims Tribunals of the State Courts to try and get their money back.
Ms Angela Lee, the operations manager of Amberlys Cakes & Flowers, has been waiting for payments requested in July, August and September. In total, the unfulfilled withdrawals amount to about S$2,400. 
She filed a small claim against Qoo10 in late August.
Vendors CNA spoke to said they tried to reach the company via email, only to receive a generic response with no clear indication of when the payment would be made.
Mr Liu, for instance, sent four emails to Qoo10. The amount the platform owes him is too large to file a small claim so he made a police report in late August. 
The issue has prompted Workers’ Party Member of Parliament Louis Chua to file a parliamentary question asking if Singapore authorities are investigating the matter. 
Minister for Trade and Industry Gan Kim Yong said in his reply on Tuesday that the government received feedback from several merchants about payment delays.
“We have brought these cases to Qoo10’s attention and requested that they take prompt action to resolve the delays with the affected merchants,” he said.
“The government is also closely monitoring developments in South Korea regarding Qoo10’s subsidiaries and is in touch with Qoo10 to assess whether and how this may affect its operations in Singapore.”
Qoo10 did not respond to CNA’s emails for comment. Calls to its office number went unanswered.
When CNA visited the building where the company is located, this reporter was not allowed to go up to Qoo10’s office on the 18th floor on Wednesday. A receptionist said Qoo10 recently asked the building’s management not to allow any visitors to its office. 
This is not the first time Qoo10 merchants have faced payment delays.
Some of them said they experienced a similar situation at the beginning of 2023 but the recent news in South Korea has fuelled worries.
“You can actually see from the news reports (in South Korea) that there are people lining up, practically at the door, to get back the money,” said Ms Lee of Amberlys Cakes & Flowers.
“So it picks up the fear.”
Adding to the uncertainty, vendors said their Qoo10 account managers have left the company. 
Mr Samuel Lim, who runs two businesses on Qoo10 and is waiting for several payments, said he was previously able to discuss the 2023 issues with his account manager and get some resolution. 
“Now that both my Qoo10 account managers have resigned, we got no other ways,” he said. 
Mr Clarence Tey, who sells cosmetics on Qoo10, also said he reached out to his account manager when he faced delays, only to realise she was leaving Qoo10.
Mandarin news platform Channel 8 recently reported that Qoo10 had laid off 80 per cent of its employees in mid-August.
Qoo10 did not respond to CNA’s questions about the job losses.
The Manpower Ministry’s Taskforce for Responsible Retrenchment and Employment Facilitation said on Aug 28 that it was monitoring the retrenchment exercise. 
Singapore’s labour movement noted that Qoo10 is a non-unionised company but said it stands ready to offer support and resources where possible to help displaced workers.
Dozens of unpaid vendors have turned to a WhatsApp chat group to discuss ways to resolve the issue, although some feel their options are limited.
“For sellers … there’s actually not much help for situations like this,” said Mr Adrian, who asked to be known only by his first name for business reasons.
“There’s so many (merchants affected), but nobody seems to be able to do anything.”
In his response to Tuesday’s parliamentary question, Mr Gan said merchants facing payment delays should raise their concerns with Qoo10.
“If the concerns remain unresolved, there are established processes in place to assist merchants in resolving commercial disputes, inclusive of debt recovery,” he added.
“Merchants who face cash flow difficulties because of the payment delays may contact any of the participating Financial Institutions listed on Enterprise Singapore’s website to apply for the Enterprise Financing Scheme (Working Capital Loan).” 
When asked if they would continue using Qoo10 if it resolved this round of delays, vendors had mixed responses. 
Mr Tey said he doubts he would continue selling unless there was news that the platform was financially stable. 
QH, the operations manager of a mask-selling business called Wistech Singapore, said they would continue using the platform if it resolves the payment delays. 
Several longtime sellers on the platform noted that Qoo10 has served them well until the payment delays.  
“It’s a bit wasted, you know,” said Ms Lee. 
“We also don’t want to break off unless there is no alternative. But it is physically and mentally draining to chase money every other month,” she added. 
“Other platforms all provide better payback arrangements.”