Qoo10 making arrangements to transfer some owed money, say affected merchants

SINGAPORE: Troubled e-commerce platform Qoo10 has told some merchants it is confirming a schedule to transfer them owed money.

Nineteen claims against the firm had been filed with the Small Claims Tribunal against Qoo10 as of Tuesday (Sep 24).

Sixteen of the claims were for non-payment, two for complaints about online shopping credits that cannot be used, and one for goods that were not as contracted.

The Monetary Authority of Singapore (MAS) on Monday suspended payment services on the e-commerce platform amid payment delays to its vendors.

Amberlys Cake and Flowers is among the merchants struggling with the payment delays. Qoo10 has owed the bakery money since three months ago.

The business has filed a claim with the Small Claims Tribunal and a hearing is set to take place on Sep 30. It has since received a notification on an upcoming payment.

"The commitment from them (Qoo10) on this Small Claims Tribunal e-negotiation platform was that they will be paying us about S$2,100 (US$1,630) by Sep 29,” said the bakery’s operations manager Angela Lee.

“By Sep 29, if let's say we haven't received anything from them, we will proceed with the filing, with the claims hearing.”

However, the amount she is owed has increased by about S$1,200 since then.

MERCHANTS AWAIT PAYMENT

Merchants said Qoo10 appears to be releasing payments for smaller amounts, according to group chat messages seen by CNA.

But for those who are owed more, there have been little updates from the beleaguered online marketplace.

This includes business owner Dave KA, who said there is an outstanding settlement of S$98,000 for his shop.

He lodged a police report last Thursday, after sending a letter of demand to Qoo10 at the end of August. For now, he is taking a wait-and-see approach.

"There is no statement. There's nothing at all from Qoo10 or anyone else. Are they going to pay? Are they going to declare bankruptcy? Are they going to go to liquidity? No one knows anything,” said the owner of Spys Trading & Consultation.

“Whenever we ask for payment, (Qoo10 says) 'We are having issues, technical issues, give us a while, we'll revert back to you'.”

He has been on the e-commerce platform for more than five years. He said delays in payment started last year, when the platform extended its payout period from seven days to 30 days.

The period subsequently became increasingly longer, and the last payment he received in around June this year took more than two months to be credited into his bank account. Since then, he has not received further payment.

Lawyer Ang Ann Liang, who has been advising some of the affected merchants, said the worst-case scenario is to commence court proceedings.

However, if the claims are small amounts, they might not be worth the legal cost, he added.

“These merchants might wish to consider linking up with other merchants with similar claims. If you join forces and share information and resources, this is something that might make the legal cost less prohibitive,” said the associate director of law firm Wong Tan & Molly Lim.
 

QOO10 APPROACHED MAS

In early September, Qoo10 informed MAS that a significant number of merchants would face payment delays. The central bank then engaged the platform's management about the delays and expressed “serious concerns”.

MAS said it has provided opportunities to Qoo10 to remedy the concerns. The authority 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.

But Qoo10 has been "unable to provide sufficient assurance" that it has the resources and systems to meet its payment obligations to merchants in a timely manner.

The authority therefore directed the platform to suspend its provision of payment services covered under the Payment Services Act.

MAS said the suspension does not prohibit Qoo10 from operating its e-commerce platform. However, there are currently no alternative payment methods available on the platform so consumers would not be able to make any payments on the site.

Qoo10 has not responded to CNA's queries.