Coupang’s places of work in Seoul’s Songpa District. (Yonhap)
In 2023, retail big Coupang overtook Emart and Lotte Purchasing to turn out to be the retail business’s highest income earner on the again of the corporate’s “Rocket Supply” system that guarantees supply inside 24 hours of putting an order.
Though Coupang was capable of attain annual gross sales of 40 trillion received (roughly US$27 billion) and seize management of the Korean e-commerce market simply 15 years after being based, the corporate has been embroiled in a lot of controversies throughout this progress course of, together with allegations of labor exploitation, battle with suppliers, and abuse of its dominant market place.
Launched as a social commerce enterprise in 2010, Coupang started to compete as an open market in opposition to business leaders Public sale and Gmarket, increasing its on-line retail channels.
To interrupt free from the race to the underside amongst e-commerce companies, Coupang launched “Rocket Supply” in 2014, looking for to distinguish itself by way of early-morning supply drivers dubbed “Coupang males” and broaden the model’s attraction amongst younger shoppers specifically.
Coupang males served as a core driver of Coupang’s skyrocketing progress, however this additionally marked the start of the furor over its labor exploitation.
In 2017, Lee Jeong-mi, then a Justice Occasion lawmaker serving on the Nationwide Meeting’s Atmosphere and Labor Committee, revealed that Coupang had didn’t pay a complete of seven.5 billion received (US$5 million) in additional time wages owed to Coupang supply drivers over a interval of three years.
As the amount of deliveries continued to develop, the next yr, Coupang expanded using “Coupang Flex,” a time period for employees employed as part-time freelancers as a substitute of standard workers, which led to criticism for creating massive portions of low-quality jobs.
Throughout the COVID-19 pandemic, the problem of labor depth got here to mild after a string of deaths amongst early-morning supply drivers and distribution middle employees. Specifically, controversy surfaced over the reporting and response to confirmed COVID-19 circumstances in Might 2020 throughout a mass outbreak at a logistics middle in Bucheon.
Later that yr in October, the loss of life of a laborer in his 20s named Jang Deok-sun as a consequence of extreme work at a distribution middle in Chilgok, North Gyeongsang Province, additionally led to sweeping criticism. In a current authorities inspection, additional allegations have been raised of exterior stress utilized to prosecution leaders in reference to delays in severance pay owed to day laborers from a logistics middle in 2023.
Coupang has additionally been concerned in conflicts over bullying home and abroad suppliers together with CJ CheilJedang and LG H&H into offering merchandise at a lower cost. One notable instance happened in November 2022 when CJ CheilJedang suspended the availability of Bibigo and Hetbahn instantaneous rice model merchandise to Coupang. The corporate was fined 162.8 billion received by Korea’s Honest Commerce Fee final yr for manipulating algorithms to position merchandise from its personal non-public model on the high of search outcomes.
Regardless of this slew of scandals, Coupang has been capable of preserve steady enterprise operations each domestically and abroad, even incomes a New York Inventory Alternate itemizing in 2021 by way of in depth lobbying.
Throughout the top of the controversy over working courier drivers to loss of life in 2020, the corporate recruited a lot of political figures from Korea and overseas, together with the appointment of recent CEO Kang Han-seung, a former Kim & Chang legal professional and authorities authorized adviser through the Lee Myung-bak administration. Based on the Nationwide Meeting Secretariat’s Workplace of the Inspector-Normal, as much as 9 legislative aides Stage 4 or greater obtained employment screenings to maneuver to Coupang (together with associates) this yr alone.
Kim Bom-suk, the founder and true proprietor of Coupang, stepped down from his positions as chairman of the board and registered director of Coupang Inc. in 2021. It seems he’s avoiding all obligation in Korea.
Leaks of non-public data presently spell the best disaster for Coupang. Based mostly on the 134.8 billion received wonderful handed all the way down to SK Telecom final yr after the USIM knowledge leak in April, it’s estimated that Coupang stands to face a penalty of as much as 1 trillion received.
Notably, the US Securities and Alternate Fee carried out a rule in September 2023 that requires listed corporations to inform traders inside 4 days of the time at which executives decide a fabric cybersecurity breach has taken place. As a agency listed on the New York Inventory Alternate, Coupang is topic to this rule and will face world regulatory liabilities.
By Solar Dam-eun, employees reporter
Please direct questions or feedback to [english@hani.co.kr]
