Sellers on shopping site Ensogo complain of late payment
Sellers using shopping website Ensogo complain of late payments, which were recently settled. One hotel manager says:
It is one of the largest online shopping websites in the South-east Asia and Hong Kong region, with offices, merchant service teams and support staff in each of the six countries it operates in.
But Ensogo Singapore, formerly known as deals.com.sg, came under fire earlier this month after irate merchantsposted on its Facebook page, demanding overdue payment.
Merchants The New Paper spoke to say the issue has since been settled and payments have been made.
In the case of one merchant, a repayment plan has been negotiated with Ensogo.
The site, which has its headquarters in Singapore and is listed on the Australian Securities Exchange,offered deals to consumers at prices cheaper than walk-in rates on items such as food and beverage, travel and fashion.
Merchants who sold their products on the site collected their payment after the sale from Ensogo, which acted as a "middleman" between them and consumers.
In one case, a hotel in the central area claimed that Ensogo owed a group of restaurants operating under the hotel about $130,000 for over a month.
The hotel was formerly a featured merchant on the website.
The hotel's restaurant sales and marketing manager told TNP that the amount accumulated over separate deals between January and April.
The deals included hotel buffets costing more than $50 a person.
The manager said: "Our initial e-mail and calls went unanswered. There was no communication at all - nothing.
"They only responded when we had no choice but to send them a letter of demand."
E-mail exchanges that TNP saw between Ensogo and the hotel showed both parties negotiating a repayment plan. Both sides finally agreed on a repayment plan on Thursday, said the hotel and Ensogo.
Said the manager: "We are still on Groupon as online deals are still a profitable model that boost traffic.
"But we will be more careful next time in choosing a website to collaborate with."
The hotel was one of several merchants affected.
Four other local merchants TNP spoke to said that in March, their deals were suddenly taken off the website without their knowledge.
They also claimed that they were not paid proceeds from the sales of their products.
E-mail and calls to Ensogo went unanswered, said the merchants.
They said they recently got their money but only after several attempts.
One of them, Ms Audrey Cheong, 23, told TNP that in March - 2½months after she started selling her products on Ensogo - her bags were suddenly taken off the site.
She said: "They owed me about $300. They did not respond to my calls and e-mail.
"I dropped by their office and the accountant said I could deal with him directly and that he would follow up, but there was no action until I posted a comment on Facebook."
She received her money on May 10.
Another merchant, Ms Goldie Gau, 31, also went to Ensogo's office after she did not receive $1,600 of what she said was owed to her from the sale of her luxury bags.
Ms Gau, who started selling on Ensogo in January this year, said things were going smoothly until the availability of all her products was changed from "in stock" to "pre-order".
The products were then taken off the website in March.
She also received her money on May 10.
In March, The Business Times (BT) reported that Ensogo, which operates in Hong Kong, Thailand, the Philippines, Malaysia and Indonesia, had laid off 22 of its 96 staff members in Singapore without notice. Ensogo confirmed this with TNP.
According to the BT report, most of the axed staff were from its services team as the company started to transition from a services model, which involved an account service manager who oversaw the operations for each merchant, to a marketplace business model where anybody can buy and sell online.
A company spokesman told BT the transition started in December last year.
A check by TNP with the Consumers Association of Singapore revealed there were six complaints this year against Ensogo.
They owed me about $300. They did not respond to my calls and e-mail. I dropped by their office and the accountant said I could deal with him directly and that he would follow up, but there was no action until I posted a comment on Facebook.
- Seller Audrey Cheong, whose products were suddenly taken off the Ensogo site
Ensogo: Our business model is changing
The New Paper sent queries to Ensogo last week and this is what its spokesman told us.
Why were local sellers having their deals pulled off the website without being informed?
We understand the point of contention with the local sellers has been that we could have managed our seller communications better. Yes, with hindsight, we agree we could have done better.
Were local sellers pulled off the website to give way to international sellers?
As we transition the business away from a service business to a global marketplace, we are working with sellers through an integrated seller-partner programme.
Local sellers are free to join the integrated seller-partner programme. Hence, it's not a local seller versus international seller conversation.
Our marketplace business has always consisted of both local self-service sellers and international integrated seller-partners.
Why were e-mails and calls from sellers unanswered?
Local sellers are supported through the seller centre, which they still have access to, and e-mails sent to firstname.lastname@example.org have been responded to. There isn't an official phone number as we operate a centralised customer service centre that services all enquiries through e-mail only.
What about sellers who said there was previously a telephone number on the website and that calls to your finance staff went unanswered as well?
Since the establishment of our centralised Manila service centre in May, there isn't a number to call.
All seller enquiries go to email@example.com.
So what is the number that appears when one searches for Ensogo on the Internet?
We've reached out to Google. This appears to be an old number that is no longer in use. In fact, you do not see any telephone numbers on our site.
Why was there was a delay in payment of one to two months for the merchants?
Our sellers were mostly concerned with not being able to withdraw their funds. Over the past six weeks, we have diligently processed and paid all valid withdrawals from our seller centre. The remaining funds are either not yet due for payment, or are contentious cases of orders not processed or refunded.
What is the progress with regards to the hotel which is owed a six-figure sum?
A negotiated payment plan agreement was reached on May 26. We are not entitled to disclose the details of the private negotiation and final agreement between both parties.
What is Ensogo's policy on commission?
We manage several different lines of business with varying commission schemes among business lines and merchants.
The local marketplace business specifically is no longer offered in Singapore, Malaysia and Indonesia.
In the original promotional pricing for the local marketplace business, it is true that the commission was set at zero.
That said, sellers had the ability to join various flash sale events for which they agreed to pay and were charged a commission.
Research before buying or selling: Lawyers
The New Paper spoke to two lawyers - Mr Emmanuel Lee of Trident Law Corporation and Mr Mark Teng of Infinitus Law Corporation about e-commerce laws.
How should merchants proceed if online shopping platforms do not pay them?
You can start civil proceedings if the site fails to pay you at the agreed time.
For smaller claims of less than $10,000, you can file a claim with the Small Claims Tribunal (SCT), where lawyers are not permitted to represent any of the parties to keep costs low.
With the consent of both the merchant and the platform, however, SCT can also hear claims of between $10,000 and $20,000.
For larger claims, you may need to hire a lawyer and start civil proceedings.
Before taking the site to court, you should check if the company is solvent. There's no point taking them to court, winning and then finding that they can't pay you.
Does a company have an obligation to inform its merchants of a change in its business model?
This depends on whether such a term is drafted into the contract with the merchants.
Merchant agreements can provide for such an obligation to notify, but this is not necessarily a standard term.
How can merchants and buyers decide if an online shopping platform is reliable?
Do basic due diligence. First, check if the platform has a history of complaints against it. Check the Case website to see if it is listed on Case's company alert list.
Next, check if the site has any "protection plans", which usually cover buyers and sellers for items lost in transit, fraud, and unauthorised payments from the buyer. Many reputable sites, such as PayPal, Amazon and eBay, have these "protection plans".
Third, merchants, in particular, should ensure that the online platform is using an escrow account.
In such accounts, a third party, normally a bank, holds the money until it receives relevant notices from the parties certifying that the transaction is complete. It's especially useful if you are dealing with large sums.
Finally, you can also insist on a written contract.
If the platform does not have a template with reasonable terms, then it pays to be vigilant.
One practical way is to do an entity search on the Government's BizFile Web portal, and look at the issued share capital. If the company's share capital is low, such as $1, this may be cause for concern.
You can also search the name of the e-commerce platform online to see if there are any adverse experiences.
Also, find out if the site has a physical presence here. This is useful as settling cross-border disputes can be expensive.