Qoo10 seeks merger of embattled e-commerce subsidiaries TMON, WeMakePrice

The chief of Qoo10, the Singapore-based parent firm of TMON and WeMakePrice, said Friday it has begun a process to merge the two e-commerce platforms to help resolve the liquidity crisis facing the companies.

On Thursday, Qoo10 applied for the establishment of a new business entity named K-Commerce Center for World (KCCW) with an initial capital of 1 billion won (US$730,000) to proceed with the merger plan, the company said in a statement.

Through the merger proposal, Ku Young-bae, the South Korean founder and CEO of Qoo10, said Qoo10 will cut its entire stakes in TMON and WeMakePrice, and he will place his entire 38 percent stake in Qoo10 under the control of KCCW.

The rearrangement will make KCCW a holding company for the Qoo10 group.

The merger between TMON and WeMakePrice requires approval from the Seoul Bankruptcy Court.

Ku said that a merger could create the fourth-biggest e-commerce platform in the country, helping the companies “swiftly normalize” their business and “revive the corporate value” to attract investment.

“It would be difficult to recover damages by selling them off,” he said.

Ku reportedly met with the chiefs of the two companies the previous day to ask for their cooperation.

The two open-market platforms filed for corporate rehabilitation with the court late last month after failing to make payments to their vendors and provide refunds to customers due to liquidity issues caused by the parent firm’s aggressive merger deals.

The financial authorities suspect there are more than 1 trillion won of unpaid bills and other liquidity issues regarding the incident.

The Qoo10 founder also plans to invite vendors to own KCCW shares in the format of a shareholders cooperative, with a plan to expand the company’s reach to the broader Asian region, the United States, Europe and India.

The merger plan, however, raised skepticism over its feasibility, with some saying that the market considers the likelihood of TMON and WeMakePrice surviving the crisis to be not high.

Some also say Ku’s move may be primarily aimed at saving himself from the ongoing prosecution investigation over alleged embezzlement, fraud and breach of duty in connection to the case.

Qoo10 was founded in 2010, and acquired TMON in 2022 and WeMakePrice last year.