Coupang Presses 'Distribution Battle' Button with Plans to Hire 50,000 More and Establish Nationwide Rocket Living Zones...

Coupang Invests 1 Trillion Won to Expand Integrated Logistics Centers to 7 and Double Employees from 50,000
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Coupang executives rang the opening bell at the New York Stock Exchange on the 11th (local time) to commemorate their listing. Customers, delivery workers, and open market sellers also participated online in the event. On stage stood Kim Hyun-myeong, Coupang IR Team Leader; Kang Han-seung, Coupang CEO; Kim Beom-seok, Chairman of Coupang’s Board; Park Dae-jun, Coupang CEO; John Tuttle, NYSE Vice Chairman; and Gaurav Anand, Coupang CFO (from left).

Creating a world where customers ask, "How did we live without Coupang?" This is the mission stated in Coupang's listing prospectus for the New York Stock Exchange (NYSE) in the United States. It has also been a goal Chairman Kim Beom-seok of Coupang's board has repeatedly emphasized. The day this goal becomes a reality seems to be approaching sooner. On its first day of trading on the NYSE, Coupang closed at $49.25, more than 40% above the initial public offering (IPO) price of $35, marking a successful debut in the global IPO market. Coupang raised approximately 5 trillion won through this listing. With these funds, Coupang plans to continue aggressive investments in the domestic market. In this process, clashes with portal companies, e-commerce companies, and large distribution conglomerates?who are strong players in the online market?are inevitable. The curtain has risen on a 'distribution war' sparked by Coupang.

Hiring 50,000 to Expand ‘Logistics’

Coupang plans to invest the funds raised from the listing into expanding domestic logistics facilities and IT infrastructure. Coupang's logistics investment dates back to the introduction of 'Rocket Delivery' in 2014. This service, unique to Coupang, guarantees product quality by purchasing goods directly and emphasizes fast delivery to enhance customer satisfaction. It was also recognized as an innovative model by investors during the IPO process. To make this possible, Coupang built its own logistics centers and delivery system, currently operating over 100 logistics centers in more than 30 cities nationwide.

To expand this, Coupang plans to invest $870 million (about 1 trillion won) to establish fulfillment centers?integrated logistics management systems covering delivery, packaging, storage, and inventory management?in seven regions across the country. This will further expand the so-called ‘Rocket Living Zone,’ areas within 10 km of Coupang logistics centers. As of 2019, there were 34 million consumers in the Rocket Living Zone, and Coupang aims to cover the entire country by 2025.

This expansion will also involve hiring 50,000 new employees. Coupang's direct and indirect workforce increased from 25,000 in 2018 to 30,000 in 2019, and currently stands at 50,000 employees. They plan to hire an additional 50,000 by 2025. Professor Jeong Yeon-seung of Dankook University's Business Administration Department explained, "Through the logistics and delivery network established nationwide, Coupang leads employment and plays a role in creating regional jobs."

Moreover, Coupang has created a ‘lock-in effect’ by retaining existing consumers through various services led by Rocket Delivery, and investments in these services are expected to continue. These include the membership service ‘Rocket Wow,’ fresh food delivery ‘Rocket Fresh,’ video streaming service (OTT) ‘Coupang Play,’ and delivery application ‘Coupang Eats.’ Based on these, Coupang's repurchase rate reached 90% last year. According to app analytics service WiseApp, among major domestic online shopping malls, Coupang has the highest average number of payments per person and repurchase rate.

Logistics Center Battle Becomes Visible

Distribution companies have also responded. Chairman Kim Beom-seok clearly expressed his intention to continue expanding business in the domestic market, stating, "Korea's commerce market is worth 530 trillion won." Naver, the number one online shopping platform, formed a ‘blood alliance’ by exchanging shares with CJ Logistics to counter Coupang. Next week, they are considering a 250 billion won share exchange with Emart, the number one offline distribution market leader. Emart, including SSG.com, plans to expand daily delivery volume to about 140,000 cases this year through three online-only logistics centers called ‘NE.O’ in Yongin and Gimpo, and over 110 picking and packing (PP) centers utilizing existing Emart stores. They aim to reach 360,000 daily deliveries by 2025 through additional NE.O acquisitions and PP center renovations.

Homeplus is also seeking to improve delivery service efficiency through three currently operated logistics centers and 139 stores nationwide. If MBK Partners, which operates Homeplus, acquires eBay Korea, combining the open market platform with the existing logistics network could generate greater synergy. Lotte Mart plans to maximize the use of six logistics centers, 113 nationwide marts, and about 340 superstores along with Lotte On and Lotte Super.

Shinsegae SSG.com, rapidly growing in the dawn delivery market, is also attracting attention. It is competitive in both product quality and delivery speed in the fresh food sector, and utilizing existing stores is considered equivalent to having a nationwide logistics base. An industry insider pointed out, "As the winner-takes-all structure of the online distribution market accelerates, those who do not receive positive evaluations in terms of future growth will quickly be eliminated from the survival competition and forgotten by consumers."

This content was produced with the assistance of AI translation services.