South Korea’s $400 Million Bailout for E-Commerce Crisis

South Korea is set to provide $400 million in financial support to small businesses impacted by payment delays on two Qoo10 e-commerce platforms. This move follows the Singapore-based firm’s founder’s pledge to utilize its own assets for customer and vendor compensation.

Seoul-based TMON and WeMakePrice recently filed for corporate rehabilitation after failing to make payments to merchants since early July, with Qoo10 attributing the issue to a payment system glitch. Approximately 210 billion won ($152 million) in payments remain outstanding, prompting vendors to sever ties and financial authorities to investigate.

The South Korean government plans to offer low-interest loans to affected businesses and extend deadlines for loan and tax repayments. Vice Finance Minister Kim Beom-seok confirmed the government’s commitment to minimizing damages. similarly, South Korea’s prosecutor general has ordered a dedicated team to investigate.

(With inputs from agencies.)