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[Newsmaker] Labor abuse scandal rocks WeMakePrice

The past two weeks have been a rollercoaster ride for WeMakePrice, the country’s leading domestic deal-of-the-day online site.

The country’s most-visited social commerce website operator was at the peak of its business earlier this year, eyeing the acquisition of a local competitor and labeling global retail juggernauts Alibaba and Amazon market competitors, but soon fell to the very bottom after facing a state crackdown for business malpractice.

The Ministry of Employment and Labor on Monday said its officers had investigated the management of WeMakePrice following allegations that the company had abused the rights of job applicants.

According to reports, the company called in 11 people who had applied for merchandiser positions and asked them to find new clients for the deal-of-the-day service.

The applicants, who had to work for up to 14 hours a day, were told that 80 percent would be hired as regular workers after on-the-job-training and screening processes. But two weeks later all of them were made redundant, paid just 550,000 won ($501) for their efforts.

The company came under fire for labor exploitation: The salary ― equivalent to 3,000 won an hour ― was far below the legal minimum wage of 5,210 won, and the employment promise was broken. 
WeMakePrice CEO Park Eun-sang. (WeMakePrice)
WeMakePrice CEO Park Eun-sang. (WeMakePrice)

WeMakePrice abruptly apologized and hired all of them. “We wanted the best merchandisers out there. But now we understand that it is our duty to train such (merchandisers),” company CEO Park Eun-sang said last week.

Still, more than 32,000 people a day have canceled their membership and the Labor Ministry said any labor violations would be dealt with sternly.

“This could be a serious threat to the business. Because social commerce is still new to the industry ― WeMakePrice launched its service in 2010 and the overall social commerce market has not seen a significant surplus ― reputation and credibility are crucial in building and breaking in a company. The government regulation could be more than a shackle,” said Oh Suk-jin, a business analyst.

“It seems that the company has found itself in hot water at the wrong time and in the wrong way,” he said.

The controversy over WeMakePrice came amid escalating public antipathy against “passion pay” ― when employers underpay staff for their passion and dedication.

Renowned fashion designer Lie Sang-bong was nominated the worst employer of the year by Youth Community Union earlier this year for paying his interns a mere 100,000 won a month.

A former Korean Air vice president’s verbal abuse and mistreatment of flight attendants in December also ignited public fury over employer-employee inequality.

Its gloomy prospects stands in stark contrast to what WeMakePrice was dreaming of less than two weeks ago.

At the end of last year, the company expressed its willingness to acquire Ticket Monster, Korea’s oldest deal-of-the-day website. However, Ticket Monster later refused the offer and denied that any negotiations were taking place.

On Friday, shortly after the labor scandal broke out, WeMakePrice failed to be shortlisted for the acquisition, falling behind LG Uplus and four other consortiums.

By Bae Ji-sook (baejisook@heraldcorp.com)
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