Sales commission as low as -1%, South Korea's TMON "uses all means" to go public

According to the Korea Times on March 29 , TMON, which is preparing to be listed in the Korean market in the second half of this year , announced that the sales commission received from sellers will be set at " -1% " from the 1st of next month .

That is to say, if sellers enter TMON and sell goods, the platform operator will return 1% of the sales amount . This also means that even if TMON faces a deficit , it must expand the scale of market sellers and consumers to strengthen the platform's competitiveness so that it can be successfully listed within the year.

A TMON official said: "The negative transaction fee policy is the first in the Korean e-commerce industry. We plan to strengthen the competitiveness of the platform by providing high-quality products at special prices based on win-win cooperation with partners ."

According to the "2020 Large Retail Enterprise Transaction Reality Survey", the actual handling fee rate of e-commerce platforms in the Korean market is about 9% on average . TMON said: "The settlement agent (PG) handling fee of about 3% will also be borne by the platform operator (but this fee does not apply to special promotional items). Sellers can enjoy various handling fee discounts as sellers, so they can sell products at a greater discount."

However , it should be noted that TMON 's special policy has prerequisites . Only sellers who register single products can enjoy the handling fee discount. Single product sales refer to the method of selling only one product , and consumers cannot choose options such as size and color.

As a seller, if you want to sell a product, you must sell the various products you currently have separately. Therefore, when registering products in online shopping malls, you need to spend several times the production fee. Therefore , Korean industry insiders said that TMON ’s negative handling fee policy can be seen as TMON indirectly subsidizing sellers’ increased costs caused by selling single products.

TMON and Coupang were both founded in 2010, and TMON later embarked on a path of rapid development through the introduction of investment by the global private equity fund KR. However, as the global e-commerce market's emulation target shifted sharply from the US group buying giant Groupon to Amazon, which combines logistics and information technology (IT), TMON suffered consecutive losses from 2015 to 2019, with a deficit of 625.3 billion won in five years.

TMON is seeking to reverse the situation by introducing a new sales concept called "Time Commerce" in 2019. According to data from the Korean industry, TMON 's annual transaction volume is currently about 4 trillion won, about one-fifth of Coupang (about 22 trillion won) .

Sales Commission

policy

South Korea