Tag: Qoo10

Singapore – The Monetary Authority of Singapore (MAS) has directed e-commerce platform Qoo10 to suspend all payment services regulated under the ‘Payment Services Act 2019’ in Singapore, following numerous customer complaints regarding significant delays in processing payments.

Effective immediately, the suspension order does not prevent Qoo10 from operating its e-commerce platform; however, the company may need to enlist a third-party payment service provider to facilitate transactions on the platform.

Between April and August 2024, MAS and other government agencies received several customer complaints against Qoo10 for delays in processing payments to these customers, who are merchants on Qoo10’s e-commerce platform. Qoo10 was asked to address these complaints, and while some were resolved, others remained outstanding. 

In early September 2024, Qoo10 notified MAS that a substantial number of merchants would experience payment delays. In response, MAS engaged with Qoo10’s management to address these issues and conveyed serious concerns regarding the situation.

On September 14, The Straits Times (ST) reported that the Singapore Police Force has started investigating complaints filed against Qoo10 and its logistics partner, Qxpress. According to vendors who spoke to ST, Qoo10, which operates in Malaysia, Indonesia, Japan, and Hong Kong, has allegedly failed to make timely payments. 

ST also reportedly reviewed documents indicating that vendors using Qxpress for shipping goods to and from Singapore have been facing delays since July. 

In an official statement, MAS said, “MAS provided opportunities to Qoo10 to remedy these concerns and required the company to take steps to satisfy MAS that it would be able to meet its obligations to merchants on an ongoing basis, including engaging a third-party payment service provider to offer the covered services.”

However, to date, Qoo10 has failed to provide adequate assurance of its resources and systems to meet its payment obligations to merchants in a timely manner, prompting the financial regulatory authority to issue the suspension order.

“MAS has had to carefully consider the potential disruption the suspension could cause to Qoo10’s e-commerce platform or other services that are integrated with the covered payment services,” MAS explained. 

“However, permitting Qoo10 to continue providing covered payments services would expose more merchants using Qoo10’s covered payment services to risks of larger outstanding obligations and potential losses. Qoo10 will be permitted to make payments to satisfy outstanding claims by such merchants but may not take on new payment obligations,” MAS added. 

According to MAS, the suspension will only be reconsidered when Qoo10 demonstrates its ability to effectively resolve the payment delays and ensure the ongoing protection of its customers’ interests in Singapore.

It is important to note that when the PS Act was introduced on 28 January 2020, existing payment service providers were granted exemptions to continue their services while their license applications were under review by MAS, ensuring that these services remained uninterrupted. While Qoo10 is not licensed by MAS, it was allowed to continue offering payment services during the review process of its application.

MAS advises merchants facing payment delays to raise their concerns with Qoo10. If these issues remain unresolved, merchants are encouraged to use established commercial dispute resolution processes, including filing a civil claim. Additionally, those experiencing cash flow difficulties due to these delays should reach out to participating financial institutions listed on Enterprise Singapore’s website to apply for the Enterprise Financing Scheme (working capital loan).

According to ST, reports of Qoo10’s issues first surfaced in July, revealing that TMON and WeMakePrice—two South Korean e-commerce platforms owned by Qoo10—had failed to pay their vendors, leading to an investigation by South Korean authorities. 

In addition, reports in August indicated that Qoo10 had reduced its workforce in Singapore by approximately 80%. The Ministry of Manpower announced that the Taskforce for Responsible Retrenchment and Employment Facilitation is monitoring the company’s retrenchment efforts.

Singapore –Singapore-headquartered e-commerce platform Qoo10 has come into agreement to acquire former e-commerce giant Wish from its parent company ContextLogic for approximately US$173m in cash. 

In an announcement made by ContextLogic, the parent company revealed it will sell substantially all operating assets and liabilities associated with Wish to Qoo10, an e-commerce platform with localised online marketplaces across Asia. 

With an acquisition cost amounting to roughly $6.50 per share, the deal still indicates an approximate 44% increase over ContextLogic’s closing stock price on February 9, 2024, the day before the transaction announcement.

ContextLogic further revealed that it will be using the proceeds from the transaction to help monetise its $2.7b net operating loss carryforwards and certain retained assets. 

The transaction is expected to be completed around the second quarter of 2024, during which the Wish brand and platform will then become part of Qoo10’s family of businesses. Also, part of the agreement is for ContextLogic to begin trading under a new ticker symbol 30 days following the closing of the sale. 

Meanwhile, Wish merchants and users are expected to benefit from an integrated platform. The acquisition promises new cross-border e-commerce opportunities and a more diverse selection of goods at competitive prices.

Wish was among the online shopping powerhouses in 2020. However, it has been in constant decline as market competition becomes tighter. 

Tanzeen Syed, chairman of the board at ContextLogic, said, “The board conducted a thorough review of strategic alternatives with the assistance of outside financial and legal advisors. We evaluated a variety of potential outcomes and determined that the proposed sale of our operating assets and liabilities, while preserving significant NOLs, represents the best path forward to maximise value for shareholders. We also believe there is significant upside potential to obtaining a long-term aligned capital partner that would support future value creation.” 

Syed continued, “The Board believes the transaction will effectively reduce the cash burn in ContextLogic to near zero, monetize its operating assets at the highest value possible, and preserve significant value for shareholders. At the same time, we believe this is a compelling opportunity for shareholders to directly benefit from the approximately $2.7 billion value of our NOLs as profitable operations are targeted by the continuing business.”

Speaking on the deal, Joe Yan, CEO of ContextLogic, also shared, “Integrating the Wish platform into Qoo10 will create a true global cross-border e-commerce platform to support the massive market demand. Upon closing, we expect the new Wish platform will have an improved customer experience through increased product assortment and merchant selection. And for our merchants, we will be able to offer fully integrated logistical capabilities to deliver unmatched cost-efficient services with high quality control and transparency. I would like to thank all of our employees for their exceptional work on behalf of Wish.”

Meanwhile, Young Bae Ku, CEO and founder at Qoo10, commented, “Wish has innovative technology that provides highly entertaining, personalised shopping experiences for its users while serving as one of the largest global e-commerce platforms. By combining our operating expertise and Wish’s technology and data science capabilities, we expect to drive greater success for merchants while providing an even greater marketplace for consumers globally.” 

“With the acquisition of Wish, Qoo10 and Wish will offer a comprehensive platform for merchants, sellers, buyers, and customers globally to realise the potential of a truly global marketplace. With the strong commitment from Wish’s employees and staff combined with the Qoo10 family group of companies, we are well positioned to realise our long-stated goal of being a leading cross-border e-commerce marketplace,” he added.