The Cracks in South Korea’s E-commerce Boom: Lessons from TMON and WeMakePrice’s Collapse

South Korea has long been heralded as a global leader in technological innovation and digital commerce. With an e-commerce market that reached a staggering 227 trillion won ($164 billion) in 2023, growing tenfold in just 13 years, the nation seemed invincible in its online retail prowess. However, recent turmoil involving two of its prominent e-commerce platforms, TMON and WeMakePrice, has raised alarming questions: Is South Korea’s e-commerce bubble about to burst?

TMON and WeMakePrice, once the fourth and fifth largest e-commerce platforms in South Korea with a combined monthly user base of over 8.6 million, have halted credit card payments and refunds since July 23, 2024. Sellers who relied on these platforms have not received payments for more than a month, with estimated damages exceeding 1.3 trillion won ($978 million). The liquidity crisis has not only impacted thousands of vendors but has also begun to affect consumers directly, leading to canceled travel plans, worthless gift certificates, and a loss of trust in the platforms.

The root of the problem lies in the platforms’ failure to settle payments to sellers due to severe liquidity issues. Banks have suspended loan services that provided advance payments to vendors, and major retailers and travel agencies have severed ties with TMON and WeMakePrice, fearing further financial instability.