SINGAPORE — In a bid to stabilize its distressed e-commerce subsidiaries, Singapore-based Qoo10 has announced plans to merge TMON and WeMakePrice. The company's chief, Ku Young-bae, revealed on Friday that Qoo10 has initiated the process by forming a new entity, K-Commerce Center for World (KCCW), backed by an initial investment of 1 billion won (US$730,000). This strategic move aims to consolidate the operations of the two platforms to address ongoing liquidity challenges.
According to Yonhap News Agency, the proposed merger will see Ku Young-bae divesting his entire 38 percent stake in Qoo10 and transferring ownership to KCCW, which is set to become the holding company for the Qoo10 group. The merger, which is subject to approval from the Seoul Bankruptcy Court, is part of a broader strategy to enhance the corporate value and operational efficiency of the e-commerce platforms. Ku highlighted that combining TMON and WeMakePrice could potentially create the fourth-largest e-commerce platform in South Korea, a critical step towards normalizing business operations and attracting new investment.
The urgency of the merger follows recent financial difficulties, with both TMON and WeMakePrice seeking corporate rehabilitation last month after their inability to fulfill financial obligations to vendors and customers. This situation has been exacerbated by the parent company’s aggressive expansion tactics, leading to a liquidity shortfall estimated by financial authorities to be over 1 trillion won. Furthermore, Ku plans to extend ownership of KCCW to vendors through a shareholder cooperative model, aiming to expand the company's market presence across Asia, the United States, Europe, and India.
However, the merger proposal has been met with skepticism regarding its viability, with concerns about the actual prospects for recovery of TMON and WeMakePrice. Critics also speculate that Ku’s consolidation efforts may be driven by personal motives, particularly to mitigate legal pressures from an ongoing investigation into allegations of embezzlement, fraud, and breach of duty linked to the subsidiaries' financial crises.