A passer-by moves past TMON's head office in Seoul, Wednesday. The country's major e-commerce platform operator on Tuesday stopped paying its platform sellers citing its cash flow crunch, triggering fears over massive delinquencies involving consumers. Yonhap

Qoo10's goal to list its logistics subsidiary Qxpress on the Nasdaq has hit a wall as money-losing businesses by its Korean e-commerce subsidiaries are scaring off their sellers from their platform. Their market survival has become doubtful, according to the market experts Wednesday.

They speculate that the debacle stems from the Singapore-based e-commerce giant's aggressive mergers of e-commerce firms worldwide, which have left it struggling to effectively manage TMON and WeMakePrice, acquired in 2022 and 2023, respectively. Both companies started delaying payments to their platform sellers earlier this month because of inadequate cash flow, causing sellers to leave the platforms out of concern.

Market officials speculated that the scale of Qoo10's global expansion, considering the company's capacity, was disproportionate and unfeasible.

Established in 2010 by Ku Young-bae, Qoo10 acquired TMON in September 2022. In March and April of the following year, it bought Interpark Commerce and WeMakePrice, respectively. The total acquisition price for the three firms was speculated to be 600 billion won ($433 million).

In doing so, Ku gained stakes in TMON and WeMakePrice in exchange for issuing new Qxpress shares, in an apparent bid to secure stable revenue sources for Qxpress and later list it on the Nasdaq.

Qoo10 continued beefing up its muscle. In February, Ku acquired the American e-commerce platform Wish for $173 million, and bought AK Mall, an e-commerce platform, through Interpark Commerce.

Despite the series of expansions, Qoo10 was hemorrhaging money fast from TMON and WeMakePrice. WeMakePrice posted an operating loss of 102.5 billion won last year, as losses widened by 50 billion won from 2022. Its sales also declined by 28 percent to 138.5 billion won.

Qoo10 founder and CEO Ku Young-bae / Courtesy of Qoo10

TMON hasn't even filed its financial audit report, which was supposed to be done by April. It had logged an operating loss of 152.6 billion won in 2022. As of 2022, its current liabilities are speculated to be worth 719.3 billion won, a 22 percent year-on-year jump, and its current assets are 131 billion won, a 22 percent year-on-year fall. The figures suggest the company has more to pay back than it can immediately cash out in a year.

Both companies are currently experiencing capital impairment, as their total capital has fallen below the par value of their capital stocks.

Both companies declined to speak to The Korea Times.

Fair Trade Commission Chairperson Han Ki-jeong said Wednesday that Qoo10's acquisition of WeMakePrice and TMON and the the two firms' controversial delinquency aren't currently under his watch because the issue is not related to the country's Monopoly Regulation and Fair Trade Act.

"The issue is a case of default and a civil matter, which the fair trade act doesnt' have a direct control over," Han said during a meeting at the National Assembly.

Amid the negative outlook, sellers at WeMakePrice and TMON have begun ditching the platforms out of concerns they might not be able to get paid by the cash-strapped companies. Home shopping channel operators, including GS Shop, CJ Onstyle, Hyundai Hmall and travel agencies like Mode Tour and Kyowon Tour, have either stopped selling their products or are planning to do so on both platforms.

Food delivery platform Yogiyo faced repercussions as it disclosed on Wednesday that some of its online discount coupons for customers had ceased functioning on Tuesday. The company attributed this unexpected issue to TMON.

"Those Yogiyo coupons were sold by TMON and distributed by TMON's partner company," Yogiyo said in a statement. "But as TMON stopped paying the partner company along with TMON's platform sellers, the company deactivated the coupons."

Yogiyo added that the Qoo10 fiasco involves a complex network of stakeholders and Yogiyo cannot solve it by itself, urging Qoo10 to come up with measures fast.