Qoo10 under Singapore police probe as vendors lodge reports over delayed payments

Source: Straits Times
Article Date: 14 Sep 2024
Author: Timothy Goh & Wong Yang

Singapore-headquartered e-commerce platform Qoo10 and its logistics subsidiary Qxpress are under police investigations, following complaints by vendors about delayed payments of thousands of dollars each and disruptions to deliveries by Qxpress.

In response to queries from The Straits Times, the Singapore Police Force said on Sept 12 that reports were lodged against Qoo10 and Qxpress, and that it is investigating.

Qoo10, which is backed by the likes of private equity firm KKR and e-commerce giant eBay, did not respond to ST’s requests for comments. Both KKR and eBay declined to comment.

Vendors told ST that Qoo10, which also has operations in Malaysia, Indonesia, Japan and Hong Kong, has failed to pay them on time.

A spokesman for a haircare retailer, which declined to be named, said Qoo10 owes the company nearly $32,000. He added that the retailer removed its listings from the platform on Sept 12.

“Previously, we were still able to receive payment from Qoo10, albeit with slight delays,” he said.

“We requested to withdraw money in June, but we still have not received our payment, and we have been chasing Qoo10 since then but they just kept telling us to wait.”

Ms Wang, the founder of infant products store Baby Gallery, who asked to be identified only by her surname, told ST on Sept 12 that the platform currently owes her company more than a year’s worth of payments, amounting to over $11,000.

While her vendor dashboard shows the payments as settled, she said she has yet to receive the funds, which is why the issue remained undetected for some time.

“I will be making a police report as it’s a huge amount,” said Ms Wang, who also removed her company’s listings from Qoo10 on Sept 12.

She noted that prior to Qoo10’s recent troubles, the platform typically released payments to Baby Gallery within seven days. However, since 2023, the time taken for the platform to release the payment has steadily lengthened.

A spokesman for Annabella Patisserie, who wanted to be known only as Andy, said Qoo10 currently owes the bakery over $25,000, or about 1½ months of payments.

“We’ve decided to write off the owed amount... and have kindly asked our customers to place future orders through other channels,” he said, although the bakery’s products remain listed on Qoo10 for now.

Another vendor, Chun Cheng Fishery, said Qoo10 only recently paid the company for its July settlement. A company salesperson said an account manager at Qoo10 indicated all pending payments would be released by mid-September, but added that the manager is unsure if this will actually materialise.

Mr Richard Siaw, managing director of law firm R.S. Solomon, said he is representing five businesses that are owed hundreds of thousands of dollars each in delayed payments from Qoo10 and plan to start action against the e-commerce platform.

He said: “My clients have waited for four to six months to see if the full amounts they are owed will be settled. They had a good relationship with Qoo10 for many years, so they were trying to work things out with them. But it has become untenable, and that is why they are now planning to take legal action.”

Meanwhile, vendors using Qxpress to ship their goods in and out of Singapore have been hit by delays since July, based on documents seen by ST.

An online K-pop merchandise reseller, who wanted to be known only as Sarah, said she has yet to receive two parcels worth $3,500 in total after over two months from the time Qxpress collected them in South Korea. Sarah, who collates group orders of K-pop albums, photocards and other items from 30 to 50 buyers in Singapore, said Qxpress picked her parcels up from her proxy buyer on July 5. She typically receives the items in Singapore about two to three weeks after they are collected there.

Although tracking data provided by Qxpress showed her parcels had arrived at its Singapore distribution centre on July 20, they were still not delivered by the end of July, and anxious buyers started texting Sarah about the status of their orders.

Most of her buyers – who each spent about $100 on the K-pop merchandise – are aged between 16 and 20, and some have used the allowance they receive from their parents to purchase the items, said Sarah, who is in her early 20s. She collects payment directly from her buyers and engages Qxpress to deliver the goods to her from South Korea, before sending each buyer their order through Singapore Post.

She added: “I’ve called Qxpress 10 to 15 times a day since early August and also sent them several e-mails. But they always give the same reply – that they will check and get back to me. It’s so frustrating because nothing has changed.”

Sarah, who works part-time in the retail industry, said Qxpress told her that three failed attempts were made to deliver the parcels to her in August, but she did not receive the items and has not seen delivery crew outside her flat. She is considering taking further action in the hopes of receiving compensation to refund her buyers.

Vendors shipping items out of Singapore via Qxpress have also been affected.

Mr Vegas Lee, a junior creative professional who sells and trades vintage Japanese designer clothing in his free time, said his buyers in the US have yet to receive their orders about a month after Qxpress picked them up from him in Singapore. His buyers usually get their items in seven to 12 days.

Mr Lee, 22, had shipped out 23 boxes of clothes and shoes worth about $3,500 to buyers in the US and Europe in the first two weeks of August. After the courier told him it had stopped operating its European delivery routes, the eight boxes intended for Europe were sent back to him in the first week of September, said Mr Lee.

Meanwhile, the tracking data for the 15 boxes meant for the US did not move for several weeks beyond an Aug 22 update saying the parcels had arrived at Qxpress’s processing facility in Singapore. When Mr Lee contacted Qxpress by e-mail and phone, customer service officers said his parcels are being processed for shipping out of Singapore, while others told him the boxes had arrived in Los Angeles International Airport.

To his relief, tracking information for 14 of the 15 parcels was updated on Sept 12 to reflect that they are on their way to or awaiting processing at freight company DHL’s distribution centre in the United States.

Mr Siaw said of the delivery issues: “If the parcels remain undelivered, Qxpress has breached its contractual obligations, making that a civil case, unless service users can actually prove that criminal offences like cheating or misappropriation have taken place.”

Reports of Qoo10’s woes first emerged in July, when it was revealed that TMON and WeMakePrice, two South Korean e-commerce platforms owned by Qoo10, had failed to pay their vendors, prompting an investigation by the South Korean authorities.

WeMakePrice reportedly had outstanding debts to nearly 500 vendors amounting to 36.9 billion won (S$36 million), according to South Korea’s financial watchdog, the Financial Supervisory Service. The platform claimed then that the issue was due to a payment system glitch which impacted the vendors.

In August, it was reported that Qoo10 had shed around 80 per cent of its staff in Singapore. The Ministry of Manpower said then that the Taskforce for Responsible Retrenchment and Employment Facilitation is monitoring the company’s retrenchment exercise.

“Workforce Singapore and NTUC’s e2i (Employment and Employability Institute) are providing career advisory and employment facilitation services to Singaporeans and permanent residents affected by the retrenchments,” it had noted.

Consumers Association of Singapore (Case) president Melvin Yong said in response to queries from ST that the consumer watchdog has received nine complaints against Qoo10 since Sept 9.

“Consumers generally complained of delayed or undelivered orders, inability to obtain refunds, and the inability to utilise credits in their accounts,” he noted. “Case has contacted Qoo10 to resolve promptly the consumer complaints.”

In response to a parliamentary question on Sept 10, Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong said the Government had received feedback from several Singapore-based merchants regarding payment delays from Qoo10.

“We have brought these cases to Qoo10’s attention and requested that they take prompt action to resolve the delays with the affected merchants,” he said.

“The Government is also closely monitoring developments in South Korea regarding Qoo10’s subsidiaries and is in touch with Qoo10 to assess whether and how this may affect its operations in Singapore.”