To me, from the onset, I have been a long time user since the Gmarket days. The experience has became worse over time than better.why u guys keep mentioning ***10 will close down?
I cannot speak for others, but I say this from my working in finance POV:
1. Loss making biz that relies on giving out discounts to gain market share at cost to own profit margin. People are waking up to fact that the gravy train is probably over. I just do a simple maths based on the ST report and what we know:
Seller on platform gets sales price less 12% Qoo10 cut. So gross margin = 12%
U look at vouchers offered: $10 off $80 (12.5%), $20 off $120 (16.67%), 30% off min $15, cap at $5.
After voucher offsets, it is even making a loss at gross level. I am already ignoring the fact that they will need to pay a payment gateway processing fee as a percentage of revenue here already (Master card, Visa, AMEX, Grabpay, eNets, Paynow, etc... Using Q*Coins is a fallacy as they still incur upfront cost when the buyers buy Q*Coins using mentioned payment methods).
For time sale events, it could be worse as they may enter into bulk contracts to secure stock and is in turn subsidising the end consumer. I bought Switch Mario Strikers Battle League at $39.90 when cost price is probably $50+, close to $60 as an example. The shop pax even told me 买到赚到。
Maybe with cheap credit then, they could go on such promotions to gain market share, but now, with credit rates being up, their funds are tied. Ordinarily, what Shopee and Lazada has done was to bring in bank and credit card merchants to help bear some of this subsidising of consumers, but these have dried up at Qoo10 vs at Shopee or Lazada as they lost too much marketshare and isn't that attractive vs Shopee and Lazada as partner. So Qoo10 needs to tank even more and yet the consumer gets lesser discounts now. On top of this, they need to pay rent, wages and other operating costs and also financing costs on loans taken out too.
2.Kiasi'ness of Singaporeans. We have seen Sinkies at their worst during Covid over Maggie Mee and Toilet Paper. When this is about their own money and wallet? Need I say more?
3. Cashflow issues being reported by media. Market fear. Read on how people withdraw funds from First Republic Bank and deposited them in the bigger banks. Then the top 11 US banks got together and then had to deposit $30 billion back at First Republic to ensure it still had money in reserves to sustain the business. The more people withdraw and put inside the big banks, the more the big banks will deposit back to First republic to prop it up to ensure confidence. After Qoo10's delay in paying out got reported, people got scared and when sellers stop wanting to sell on the platform and people keep getting rejected orders, people want to jump too. Unless it gets a big angel investor in to backstop all this flight of funds and its widely reported and cashflow issues resolved, people will just take flight.
Got more points but I am tired now.
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