[Column] Raising Expectations for Coupang

"We regret the Fair Trade Commission's judgment that Coupang, which was merely a newly established distribution company in the past, holds a superior bargaining position over the industry's leading large corporations." This is the opening statement of Coupang's position released on the 19th regarding the sanctions imposed by the Fair Trade Commission for violations of the Fair Trade Act and the Large-Scale Distribution Business Act. There is a gap between Coupang's modest description of itself as a newly established distribution company at the time and the market's evaluation.

The origin of the incident that led to this sanction dates back to 2017 and 2018. Coupang was the third-largest player in the online market, but its evaluation was not limited to third place. Since launching 'Rocket Delivery' in 2014, the growth strategy it maintained took root, and the period saw a significant expansion of results. In fact, Coupang achieved over 50% sales growth for 15 consecutive quarters from the third quarter of 2017 through the second quarter of this year. This explosive growth was made possible by the innovation of introducing an online direct purchasing method based on IT, and Coupang's status, having even been listed on the New York Stock Exchange this year, is completely different from four years ago.

Behind this Fair Trade Commission sanction lies an implicit evaluation of the online-based innovation that enabled Coupang's growth. The Fair Trade Commission stated, "Recently, the position of online distributors has been further secured, so it was recognized that they also have superior power over large corporate suppliers."

What Coupang should note is that the cause of this sanction is not only the check from large corporate manufacturers. As Coupang has grown, voices demanding social responsibility have also increased. The criticism poured out after the fire at the Deokpyeong Logistics Center in Icheon, Gyeonggi Province, last June is evidence of social interest in Coupang and its market influence. After the fire, a withdrawal campaign spread on social media, with people saying they would no longer use Coupang. The changed expectations toward the grown Coupang are also reflected in this sanction.

Since Coupang has grown with a unique business model, not just as one of many e-commerce companies, such demands will only increase. This is an area Coupang must pay attention to and prepare for to sustain growth. The closing remark of this position statement, "We will continue to do our best for the growth of small business owners and the convenience of consumers," is not mere lip service but the essence Coupang must focus on.

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