South Korea to Inject $404.55 Million in Liquidity for Ailing E-commerce Vendors

South Korea's finance ministry announced a liquidity support package worth at least 560 billion won ($404.55 million) to aid small businesses affected by delayed payments from e-commerce platforms TMON and WeMakePrice. The government aims to minimize damage through low-interest policy loans and payment extensions while ensuring proactive remedies by these firms.

South Korea's financial authorities are set to provide a substantial liquidity support package amounting to 560 billion won ($404.55 million) aimed at small businesses suffering from delayed payments by e-commerce platforms, the finance ministry confirmed on Monday.

Last week, an official investigation was launched into South Korean e-commerce giants TMON and WeMakePrice, owned by Singapore-based Qoo10, due to their failure to fulfill vendor payments. In response, Vice Finance Minister Kim Beok-seok stated that the government would deploy all available resources to mitigate the impact, emphasizing that liability lies with the e-commerce firms. Notable measures include low-interest policy loans and extensions for existing loan and tax repayments.

In a bid to alleviate the crisis, both TMON and WeMakePrice are actively notifying customers about credit card payment cancellations, though long lines of concerned customers were seen outside their Seoul offices. Ku Young-bae, the South Korean founder of Qoo10, apologized and pledged various efforts to resolve the issue, noting that missed payments have accumulated to an estimated 210 billion won. Qoo10 has promised to secure $50 million to address the damage but has yet to submit a detailed plan.

(With inputs from agencies.)