Coupang Faces 'Worries' Over False Claims by Civic Groups and Labor Unions

Concerns Over Declining Investment Intentions of the Third Largest Domestic Employer

Since the beginning of this year, civic groups and labor unions targeting Coupang have been intensifying their attacks. Coupang is taking a tough legal stance, while the level of allegations from these groups continues to rise, resulting in ongoing daily disputes. There is also an analysis that this is part of a ‘National Assembly audit beating’ against companies ahead of the upcoming national audit.

A representative example is the recent 'fact dispute' between Coupang and the People’s Solidarity for Participatory Democracy (PSPD). On the 30th of last month, PSPD reported to the Fair Trade Commission that Coupang favored its private brand product manufacturing and sales subsidiary, CPLB. PSPD claimed, "Coupang charges other sellers an effective commission of 31.2%, but supports its subsidiary CPLB with a low commission of 2.55%."

In response, Coupang strongly denied this, calling it a "misinterpretation and factual error in the audit report." They explained that the service fees in the audit report were mistakenly interpreted as commissions. Due to CPLB’s direct purchase business structure, no commission can exist, and the 31.2% effective commission applies only to exceptional special contract purchase transactions, which account for just 0.9% of Coupang’s total transactions. Coupang even sent a certified letter to PSPD demanding the deletion of related posts from their website.

Since the end of June, the Korean Confederation of Trade Unions (KCTU), which has occupied Coupang’s lobby, has been escalating attacks on Coupang through political channels ahead of the national audit. On the 6th, Justice Party lawmaker Lee Eun-ju held a press conference at the National Assembly urging the Ministry of Employment and Labor to take measures against Coupang’s anti-labor practices. She claimed, "Coupang, Coupang Eats, and Coupang logistics centers are all neglecting labor union bargaining demands," and "recently, like at the logistics centers, they have not prepared proper heatwave countermeasures."

Regarding these claims, Coupang rebutted, stating, "There are break rooms with air conditioners on every floor, and thousands of customized cooling devices such as large ceiling fans and air circulators are operating in each logistics center." An expert opinion also noted, "Large logistics centers are as tall as 20-story apartment buildings with an open structure, similar to gas stations where vehicles frequently come and go." Additionally, Coupang stated, "At the end of July, just before signing an agreement on various pending issues with the union, the union unilaterally broke the agreement." It is reported that among 41,288 former employees of Coupang Fulfillment Services, only about 200 are union members, representing approximately 0.4%.

There are concerns that these attacks are overshadowing the positive effects of Coupang’s growth. Coupang’s number of employees increased significantly from 25,307 in 2019 to 65,772 in 2021, making it the third-largest employer in South Korea after Samsung Electronics and Hyundai Motor Company. During the same period, sales and transaction volumes of small business owners doubled. As of the end of last year, the number of small business owners selling on Coupang was 157,000, accounting for 80% of all partner sellers. Since its listing on the U.S. stock market last year, Coupang has raised 1.8 trillion won and is focusing on building domestic logistics centers. A retail industry official said, "Coupang’s logistics and employment investments, which will continue in the future, could be weakened by attacks from external groups."

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