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Tag: Coupang

  • US Investors Seek Govt. Probe into South Korea over Alleged Unfair Treatment Post Coupang’s Data Breach

    US Investors Seek Govt. Probe into South Korea over Alleged Unfair Treatment Post Coupang’s Data Breach

    Two prominent American investors in South Korean e-commerce giant, Coupang Inc., have lodged formal complaints with the US government. They are seeking an investigation into what they perceive as prejudiced actions by the South Korean government against the company.

    Investors Call for Investigation

    Greenoaks and Altimeter, the two tech investment firms, have also initiated arbitration proceedings against South Korea. They cite the US–Korea Free Trade Agreement (KORUS) and accuse Seoul of leading an aggressive campaign against Coupang in the wake of a significant consumer data breach. This breach, they claim, has led to billions of dollars in investor losses.

    The petition follows Coupang’s disclosure in November that the personal data of approximately 33 million South Korean customers had been compromised. The breach led to substantial public and political backlash, resulting in comprehensive investigations and multiple lawsuits from both investors and consumers.

    The investors have petitioned the US Trade Representative (USTR) to scrutinize South Korea’s actions and impose “appropriate trade remedies.” These could potentially include sanctions and tariffs, as they assert that the response to the data incident exceeds standard regulatory enforcement measures.

    Potential Implications

    The situation could escalate this corporate dispute into a potential intergovernmental trade conflict, leveraging US trade law and international treaties to challenge the actions of South Korean authorities. However, there has been no comment thus far from the USTR.

    South Korean President Lee Jae Myung has previously advocated for stringent penalties following the Coupang data incident. He reiterated at a recent press conference that South Korea will address this issue impartially, adhering strictly to the country’s legal framework and principles.

    South Korea’s Trade Minister, Yeo Han-koo, earlier dismissed accusations of discrimination against Coupang. He argued that significant data leaks, coupled with Coupang’s inadequate response, should be viewed separately from trade and diplomatic issues. He stated that in a similar situation, US authorities would naturally retaliate in the same manner against a Korean business operating in the US.

    Investor Accusations

    The investors accuse the South Korean government of initiating an extensive government response to undermine Coupang’s operations, including labor, financial, and customs investigations seemingly unrelated to the data breach.

    Marney Chee, a partner at Covington representing Greenoaks, expressed concerns over both the magnitude and speed of the government’s response. He stated that such actions have led to substantial damages and pose a threat to their Coupang investment’s value.

    Since the company disclosed the data breach at the end of November, Coupang’s shares listed on the New York Stock Exchange have fallen by around 27%. The investors aim to halt what they deem as prejudiced conduct and seek to reinstate fair and predictable business conditions for US companies operating in South Korea.

    Future Implications

    The formal notice sent via KORUS initiates a 90-day ‘cooling-off’ period for consultation before the commencement of full arbitration proceedings. Separately, the USTR has up to 45 days to determine whether to initiate a formal investigation. This step could pave the way for public comments, hearings, and possible US countermeasures, including tariffs on South Korean goods and services.

    Greenoaks, one of the alleging parties, was founded by Coupang board member Neil Mehta. Greenoaks and related entities hold more than $1.4 billion worth of Coupang shares. In 2023, Coupang also partnered with Greenoaks to acquire luxury fashion platform Farfetch in a deal worth $500 million.

    Questions & Answers

    What are the investors accusing the South Korean government of?
    The investors, Greenoaks and Altimeter, accuse the South Korean government of discriminatory treatment of Coupang following a significant consumer data breach.

    What is the potential impact of this dispute?
    This disagreement could escalate from a corporate dispute to a government-to-government trade issue, potentially resulting in US sanctions and tariffs against South Korea.

    What is the investors’ ultimate goal?
    The investors are seeking an end to what they perceive as prejudiced conduct by the South Korean government and are calling for the reinstatement of fair and predictable business conditions for US companies operating in South Korea.

  • Coupang in Hot Water: US Investor Lawsuit Challenges South Korea’s E-commerce Giant over Massive Data Breach

    Coupang in Hot Water: US Investor Lawsuit Challenges South Korea’s E-commerce Giant over Massive Data Breach

    South Korea’s major e-commerce entity, Coupang, is facing a class-action lawsuit from investors in a US court over alleged violations of securities laws. The lawsuit is in relation to a significant cybersecurity breach that led to the exposure of personal information of over 33 million customers.

     The Allegations

    The class-action lawsuit, instigated last week in a California federal court, accuses Coupang, its CEO and chairman, Bom Kim, and its CFO, Gaurav Anand, of misleading investors about the company’s data security measures and failing to disclose the breach promptly.

    Coupang, often referred to as South Korea’s answer to Amazon, expressed regret over the unauthorized data access that led to the breach of personal information last month. Following the aftermath of the breach, Park Dae-jun, CEO of the subsidiary Coupang Corp, decided to step down earlier this month.

    In response to the breach, Coupang has stated its intent to enhance its security measures to prevent any future data leaks.

     Response from Coupang and Legal Representation

    As of now, Coupang and the legal counsel representing the investor who initiated the lawsuit on the 18th of December have not offered any comments.

    Coupang, a global operation with offices in California and other cities across the US, dominates South Korea’s e-commerce market. The company offers services ranging from same-day delivery to video streaming and food delivery. The recent data breach has triggered investigations in South Korea.

     Details of the Breach

    According to the lawsuit, Coupang discovered on November 18th that a former employee had illicitly retained access to its internal systems for several months. As a result, customer names, email addresses, delivery addresses, and some order histories were compromised. Coupang has assured that no payment details or login credentials were exposed in the breach.

    The lawsuit also alleges that Coupang failed to disclose the breach in compliance with US securities rules in a timely manner.

    The lawsuit further contends that Coupang’s US regulatory filings downplayed the company’s susceptibility to cyberattacks and exaggerated its protective measures. The plaintiff is seeking damages for investors who acquired Coupang securities between August 6th and December 16th.

    Questions & Answers

    What are the allegations raised against Coupang in the class-action lawsuit?
    The lawsuit alleges that Coupang misled investors about its data security measures and failed to disclose a major cybersecurity breach promptly.

    What was the impact of the data breach?
    The breach led to the unauthorized exposure of personal information of over 33 million customers, including names, email addresses, delivery addresses, and some order histories.

    What is the relief sought in the lawsuit?
    The plaintiff is seeking damages for investors who acquired Coupang securities between August 6th and December 16th.

  • Coupang CEO Steps Down Amidst South Korea’s Largest Data Breach Scandal: Security Measures Revamped

    Coupang CEO Steps Down Amidst South Korea’s Largest Data Breach Scandal: Security Measures Revamped

    In light of a severe data breach, one of the most significant in South Korea’s history, Coupang Corp’s CEO, Park Dae-jun, has resigned. The cyberattack exposed the personal details of approximately 33.7 million customers, including their names, email addresses, phone numbers, shipping addresses, and certain order histories. However, payment details and login credentials were not compromised in the breach.

    Park’s Tenure and Resignation

    Park Dae-jun had been a part of Coupang Corp since 2012, ascending to the position of co-CEO in 2020, and subsequently becoming the sole CEO in May amid a company-wide leadership restructuring. Following the data breach incident, Park accepted responsibility for the breach and its handling, expressing his deep regret for letting down the public. He announced his decision to resign from all his positions within the company.

    In response to the significant breach, the e-commerce giant issued an apology, expressing deep regret for the anxiety caused by the data leak. The company pledged to work diligently to regain customer trust and strengthen security protocols to prevent future data breaches.

    Leadership Transition

    In the wake of Park’s resignation, Coupang Inc., Coupang Corp’s US-based parent company, has appointed Harold Rogers, the company’s chief administrative officer, as the interim CEO for the Korean branch.

    The appointment comes in the aftermath of one of South Korea’s most devastating data breaches, believed to have originated in June.

    South Korean Prime Minister Kim Min-seok announced earlier this week that the government would be investigating any possible legal violations made by the company. In response, police subsequently initiated a raid on the company’s office in Seoul.

    Under the new interim CEO, the company’s key focus will be on relieving customer anxiety, resolving the data breach issue both from within and outside the company, and restoring stability to the organization. The leadership transition signifies the parent company’s proactive approach to managing the fallout from the data leak incident.

    Questions & Answers

    Why did Coupang Corp’s CEO, Park Dae-jun, resign?
    Park Dae-jun resigned from his position due to a major data breach that exposed personal information of about 33.7 million customers.

    Who has been appointed as the interim CEO following Park’s resignation?
    Harold Rogers, the chief administrative officer of Coupang Inc., the US-based parent company of Coupang Corp, has been appointed as the interim CEO.

    What are the company’s plans following the data breach?
    The company has pledged to restore customer trust, enhance security measures, and focus on resolving the data breach issue, both internally and externally, under the new interim CEO.

  • Coupang Executives Under Scrutiny for Stock Sales Post-Major Data Breach: A Potential Insider Trading Scandal?

    Coupang Executives Under Scrutiny for Stock Sales Post-Major Data Breach: A Potential Insider Trading Scandal?

    Concern is mounting over potential insider trading at Coupang, following the sale of company stock by two senior executives occurring after a massive data breach and before its public acknowledgment.

    Executives Sell Shares After Data Breach

    On November 10, Coupang’s Chief Financial Officer, Gaurav Anand, sold 75,350 shares at $29.0195 each, a transaction that reached approximately $2.19 million (around 3.2 billion won). Pranam Kholari, a former senior vice president with responsibilities for search and recommendations, also sold shares. On November 17, Kholari offloaded 27,388 shares for about $772,000 (1.13 billion won). Noteworthy to mention, Kholari resigned from his position just three days prior, on November 14.

    Interestingly, both transactions occurred after the unauthorized access to user accounts took place, but before the company went public with the extent of the breach. This timing has intensified scrutiny over the possibility of executives acting on nonpublic information.

    Massive Data Breach at Coupang

    Coupang, on November 29, announced that around 33.7 million customer accounts had been compromised in the data breach. The affected information included names, emails, phone numbers, addresses, and selected order details. Prior to this, on November 18, the company had reported a smaller breach affecting about 4,500 users.

    A report submitted to the Korea Internet & Security Agency reveals that Coupang detected the unauthorized access on November 6 at 6:38 p.m. However, the company did not identify the data breach until November 18, a 12-day delay that has invited questions from lawmakers and regulators.

    The timing of the stock sales and the subsequent delay in acknowledging the breach are expected to be a focal point of investigations into the data leak, which has been one of the largest in Korea’s e-commerce sector.

    Questions & Answers

    What are the implications of the stock sales by Coupang’s executives?
    The stock sales, given their timing, have raised concerns over potential insider trading, with both transactions occurring after the data breach but before its public acknowledgment.

    What information was compromised in the Coupang data breach?
    The compromised information includes customers’ names, emails, phone numbers, addresses, and selected order details, with approximately 33.7 million customer accounts affected.

    What prompted questions from lawmakers and regulators regarding the data breach?
    The company’s delay in identifying and disclosing the data breach, which was detected on November 6 but not formally acknowledged until November 18, has led to queries from regulatory bodies and lawmakers.

  • Coupang Data Breach: Unmasked Details of 33 Million Customers Sparks Privacy Fears

    Coupang Data Breach: Unmasked Details of 33 Million Customers Sparks Privacy Fears

    Increased apprehension has gripped South Korea following a significant data leak at e-commerce giant, Coupang. Officials have indicated that this breach could have been overlooked for an extended period.

    Scale of Data Leakage

    Coupang, a United States-listed merchant, revealed on a recent Saturday that the private information of 33.7 million consumers, essentially its entire client base, had been jeopardized. The vulnerable data encompass names, contact numbers, email addresses, and delivery locations. The company reassured that financial information, credit card specifics, and login details remained untouched.

    Based on Coupang’s findings, unauthorized infiltration into the delivery-related private data seems to have been carried out via foreign servers from June 24 onwards.

    Investigation Update

    Individuals familiar with the situation have shared that the police have pinpointed at least one suspect. The person is allegedly a former Chinese worker of Coupang who has since dissociated from both the company and the nation. The authorities initiated an inquiry after receiving a complaint.

    Coupang confirmed detecting the data leak on November 18 and informed the regulators within the subsequent two days. The corporation initially stated that approximately 4,500 accounts had been impacted.

    Implications of the Breach

    The magnitude of the data exposure, which is now proven to be considerably more extensive and long-standing than initially conveyed, has unsettled consumers. They are apprehensive that their data might be exploited for fraudulent activities or phishing strategies. The event now surpasses the cyber breach at SK Telecom in April, which affected data from 23.2 million users and led to a record penalty of 134.8 billion won.

    The final repercussions could escalate as the investigation progresses. A similar recent incident involving Lotte Card initially denied leakage of financial data following a breach in September. The company had to backtrack two weeks later and admit that credit card numbers and other critical data had indeed been laid bare.

    Questions & Answers

    What type of data has been compromised in the breach at Coupang?
    Names, phone numbers, email addresses, and delivery locations of customers have been exposed.

    Who has been identified as a possible suspect in this data breach incident?
    The police have identified a former Chinese worker of Coupang as a possible suspect.

    What are the possible implications of the data breach at Coupang?
    This breach has unsettled consumers who fear their personal data might be exploited for fraudulent purposes or phishing schemes. There is also a possibility of monetary penalties for the company.

  • Unveiling Coupang’s Winning Strategy: Streak of Profits and Global Expansion Rooted in Operational Innovation and Taiwanese Traction

    Unveiling Coupang’s Winning Strategy: Streak of Profits and Global Expansion Rooted in Operational Innovation and Taiwanese Traction

    Coupang, a South Korean e-commerce giant, has experienced substantial growth, recording a record quarterly revenue of $9.3 billion during the three months leading up to September – a 20% year-on-year increase. This growth not only signifies the company’s third profitable quarter in a row since being listed on the New York Stock Exchange in 2021, but also a significant 51% leap in operating income to $162 million.

    Boosted by Local and Overseas Markets

    Coupang’s financial gain is attributed to both sustained growth in its domestic market and successful expansion into Taiwan. The company’s CEO, Bom Kim, expressed satisfaction with the progress, particularly in the Korean market, which he believes to be a largely untapped opportunity for further growth. He also noted a strong and varied customer base that continues to support the company.

    Domestic Strength and Expansion

    Coupang’s Product Commerce sector, encompassing Rocket Delivery, Rocket Fresh, Rocket Growth, and Marketplace, saw an 18% increase in net revenue to $8 billion. The company’s adjusted EBITDA also went up by a remarkable 50% to $705 million. This positive performance propelled Coupang’s gross profit margin, reaching a record 29.4%, largely due to supply chain efficiencies and the expansion of higher-margin categories. Furthermore, the company reported that it ended the quarter with 24.7 million active customers, a 10% increase from the previous year, and a 7% rise in revenue per active customer to $329.

    Taiwan as a New Growth Engine

    In recent times, Taiwan has emerged as a significant growth engine for Coupang. The company’s Developing Offerings segment, which includes Taiwan, Coupang Eats, Coupang Play, and Farfetch, experienced a 32% annual growth to $1.3 billion. The Taiwan business itself reportedly experienced growth in the “triple digits,” largely driven by the increased adoption of Rocket Delivery and the newly launched third-party marketplace.

    Strategic Investments and Operational Innovations

    Despite the widening losses in the Developing Offerings segment, Coupang’s management stated that this reflects strategic investments rather than operational shortcomings. The company is accelerating the deployment of automation technologies across its logistics and fulfillment network, which is expected to improve service levels and operating costs.

    In addition to operational innovation, Coupang is also investing in sustainability. The company expanded its reusable ‘ecobag’ program to cover a wider range of deliveries, reducing packaging waste and enhancing the customer experience.

    Broadening Offerings

    Coupang’s Fulfillment and Logistics by Coupang (FLC) service continues to grow, which not only allows merchants to utilize the same logistics infrastructure that powers Rocket Delivery, but also helps to deepen merchant relationships and diversify revenue streams. Kim believes that one of the biggest opportunities for Coupang’s future growth lies in broadening the selection across both first-party and marketplace offerings.

    Questions & Answers

    What contributed to Coupang’s record quarterly revenue?
    Coupang’s record quarterly revenue of $9.3 billion results from steady growth in the South Korean market as well as successful expansion into Taiwan.

    What is the strategic direction of Coupang’s operational innovation?
    Coupang aims to improve service levels and reduce operating costs by accelerating the deployment of automation technologies across its logistics and fulfillment network.

    How is Coupang’s expanding its customer value proposition?
    Coupang plans to expand its customer value proposition by broadening the selection across both first-party and marketplace offerings, which is expected to drive future growth.

  • Coupang Triumphs In Court: Dismissal Of Shareholder Fraud Lawsuit Bolsters South Korean Giant

    Coupang Triumphs In Court: Dismissal Of Shareholder Fraud Lawsuit Bolsters South Korean Giant

    Coupang, often referred to as South Korea’s Amazon equivalent, successfully dismissed a lawsuit on Wednesday that alleged the company had defrauded shareholders during and following its 2021 initial public offering (IPO), the most significant IPO by a foreign entity on Wall Street in over six years.

    Details of the Lawsuit

    The lawsuit was filed by US District Judge Vernon Broderick in Manhattan on behalf of shareholders spearheaded by a group of New York City public pension funds. The shareholders claimed that Coupang and its executives intended to deceive them, made materially misleading comments, and neglected to address evident discrepancies that rendered their public declarations false.

    Allegations against Coupang included concealing hazardous working conditions in its warehouses, manipulating search results, directing employees to write product reviews favoring its private-label brands, and pressuring suppliers to inflate prices on competitor platforms for products it would then automatically price-match.

    The shareholders pointed out that the share price of Coupang plummeted by over half within a year of its March 2021 IPO, following revelations that included multiple investigations by South Korea’s Fair Trade Commission and a large warehouse fire.

    Judge’s Decision

    In a comprehensive 83-page decision, Judge Broderick stated that many of Coupang’s assertions about working conditions were either too vague or “aspirational” to be misleading. Similarly, comments about its supplier relationships were deemed overly unspecific, initially truthful, or amounted to “puffery.”

    Broderick further noted that the shareholders failed to establish “with particularity” the circumstances surrounding Coupang’s alleged price manipulation. He also recognized that the company had acknowledged its employees were writing the reviews.

    Additionally, the judge dismissed all allegations against the IPO’s underwriters, including Goldman Sachs, JPMorgan Chase, and Allen & Co. The lawsuit was dismissed with prejudice, therefore prohibiting it from being refiled.

    Reaction to the Decision

    The legal representation for the shareholders and New York City Comptroller Brad Lander—who oversees the pension funds—did not provide an immediate response to requests for comment.

    “We believed from the start that the claims were baseless, and today’s decision confirms that belief,” a Coupang spokesperson said in a statement.

    Coupang, founded in 2010 by billionaire Bom Kim and originally based in Seoul, relocated to Seattle after going public but continues to operate in several countries, including South Korea.

    With the financial support of Softbank Group, Coupang secured US$4.6 billion through its IPO, marking the largest IPO by a foreign company on Wall Street since the Chinese e-commerce company Alibaba went public in September 2014.

    Questions & Answers

    What were the allegations against Coupang?
    Shareholders accused Coupang of concealing hazardous working conditions, manipulating search results, directing employees to write favoring product reviews, and pressuring suppliers to inflate prices on competitor platforms.

    What was the outcome of the lawsuit filed against Coupang?
    The lawsuit was dismissed with prejudice, indicating that it cannot be brought again. This followed Judge Broderick’s decision that several of Coupang’s statements were too broad, aspirational, or amounted to “puffery” to be considered misleading.

    What was the financial impact of Coupang’s IPO?
    Backed by Softbank Group, Coupang raised US$4.6 billion in its IPO, making it the largest IPO by a foreign company on Wall Street since Alibaba in 2014.

  • Coupang Surpasses $8 Billion Mark: Record Revenue And Profit Turnaround Amid Taiwan Expansion

    Coupang Surpasses $8 Billion Mark: Record Revenue And Profit Turnaround Amid Taiwan Expansion

    South Korean retail behemoth Coupang has experienced substantial growth this year, boasting a record revenue of $8.52 billion in Q2, a rise of 19% year-over-year with an FX-neutral basis. This marks the first time the company has surpassed the $8 billion mark.

    Additionally, Coupang achieved a net profit of $31 million, a significant turnaround from last year’s Q2 deficit of $105 million. The company’s adjusted EBITDA hit $428 million.

    Core Strengths

    Coupang’s primary source of income comes from its Product Commerce sector, which encompasses Rocket Delivery, Rocket Fresh, Rocket Growth, and the marketplace. The adjusted EBITDA for this segment climbed to $663 million, and margins reached an unprecedented 9%.

    Most of the revenue growth in Q2 came from existing customers. According to Bom Kim, Coupang’s founder and CEO, even the oldest customer cohorts demonstrated robust spending increases in the double digits.

    Kim stated, “As we expand our selection to match customer preferences, they’re also purchasing across a broader number of categories.”

    The Rocket Delivery model, previously criticized for its extravagant spending and capital intensity, is now viewed as a competitive advantage. Same-day and dawn delivery volumes soared over 40% year-over-year, primarily due to the addition of over half a million new Rocket SKUs in Q2.

    Taiwan’s Progress

    Coupang’s Developing Offerings segment, which encompasses Taiwan Rocket Delivery, Coupang Eats, Coupang Play, and Farfetch, posted a revenue of $1.19 billion, an increase of 33% year-over-year. Although this unit is still not profitable, with an adjusted EBITDA loss of $235 million, a majority of this loss can be attributed to increased investment in Taiwan.

    Coupang’s CFO, Gaurav Anand, noted that Taiwan is the main reason behind a revised full-year EBITDA loss prediction for the segment, estimated to be between $900 million and $950 million.

    Coupang launched its Wow membership program in Taiwan in March, targeting a population of 23 million and a retail sector valued at $152.7 billion. Since entering the market in 2022, the company has invested approximately $355 million in expanding its logistics infrastructure and product selection.

    This investment appears to be producing early results, with Taiwan’s revenue surging 54% quarter-over-quarter and recording triple-digit growth year-over-year. These improvements are not only due to customer acquisition but also improved customer retention and spending.

    Kim commented, “Our Taiwan offering is growing faster and stronger than even the most optimistic forecasts we set at the beginning of the year.” He added that they see a similar growth trajectory in Taiwan as they did in the early years of scaling their retail offering in Korea.

    Despite initial concerns, Coupang’s aggressive investment indicates growing belief that Taiwan could become a second profitable market in the long term.

    While Taiwan’s progress overshadows other areas, Coupang’s other businesses continue to develop. Food delivery service Coupang Eats showed continuous double-digit growth, benefiting from the company’s established logistics infrastructure.

    Additionally, Coupang Play, its streaming platform, has added new features like a Sports Pass, providing access to premium sports leagues ranging from the Premier League to Nascar.

    Although these businesses are not yet profitable, they help to retain users within the Coupang ecosystem.

    Looking forward, Coupang faces significant challenges. The South Korean retail sector has been declining for 13 consecutive quarters – the longest recorded downturn. With limited room for further growth at home, the company’s future hinges on maximizing each customer’s value or finding new customers abroad. Taiwan is off to a strong start, but expanding it into a second growth engine may prove challenging, and the level of investment required could test investor patience if results don’t keep up the pace.

    Questions & Answers

    What contributed to the growth of Coupang’s Q2 revenue?
    Existing customers contributed to most of the growth, with spending increases across all cohorts. Additionally, the company expanded its product selection, leading to customers buying across a wider range of categories.

    What is the role of Taiwan in Coupang’s financial strategy?
    Taiwan is a significant focus for Coupang’s investment, aimed at expanding its market beyond South Korea. The company’s aggressive investment in Taiwan indicates a growing belief that it could become a second profitable market in the long term.

    What challenges does Coupang face moving forward?
    Coupang is challenged by the continuous decline in the South Korean retail sector. With limited potential for domestic growth, the company’s future success increasingly relies on maximizing value from each customer and expanding its customer base abroad. Additionally, the level of investment required in markets like Taiwan could test investor patience if results don’t match the pace of investment.

  • Coupang fined US$102 million for manipulating search algorithm

    Coupang fined US$102 million for manipulating search algorithm

    South Korea’s antitrust regulator has fined e-commerce giant Coupang 140 billion won (US$102 million) for using unfair search algorithms and manipulating product reviews to boost sales of its own private-label items.

    The Fair Trade Commission (FTC) also referred the company, as well as one of its subsidiaries, Coupang Private Label Brands (CPLB), to the prosecution for further investigation and ordered the companies to take corrective measures.

    Coupang has used” deceptive algorithms” according to the FTC, giving them greater exposure to the retailer’s private-label products on its platform ahead of those from other suppliers since February 2019.

    By doing so, at least 64,250 kinds of products have been prioritised, which caused the total sales of such items to soar over 76 per cent during the period.

    The company also had 2297 employees write positive product reviews of private-label products since 2019 in an effort to boost its sales.

    They wrote a combined 72,614 reviews of 7342 kinds of private brand items so far, which helped those products to be exposed more easily in violation of the Monopoly Regulation and Fair Trade Act.

    “Such practices have prevented customers from making reasonable choices and hampered fair market competition,” the FTC said, vowing stern responses to such unfair business practices.

    Established in July 2020, CPLB is Coupang’s subsidiary in charge of selling private brand items.

  • Coupang launches overseas direct purchase service in Japan

    Coupang launches overseas direct purchase service in Japan

    Coupang customers in South Korea can now directly purchase products from Japan, thanks to the e-commerce platform’s expansion of its overseas direct purchase service.

    With Japanese products now available through the Rocket Jikgu direct purchase service, customers can now purchase food from brands such as Nissin, Meiji, LeTao, and AGF, and beauty items from brands such as Senka, Bioré, Fino, Tsubaki and P&G Japan.

    The platform will also offer home improvement brands Ishida and Joseph Joseph and stationery products from Zebra, Mitsubishi, and Pentel.

    The company first launched Rocket Jikgu in the US in 2017 and has expanded the direct purchase service since.

    The South Korean online retailing giant has then added China to its Rocket Jikgu network in 2021 and Hong Kong in 2022.

    Last year, the Japanese overseas direct purchase market grew by 11 percent, with food purchases surging about 45 percent.

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  • Coupang launches luxury beauty shopping service Rocket Luxury

    Coupang launches luxury beauty shopping service Rocket Luxury

    South Korea’s top e-commerce retailer Coupang said Monday it has launched a new service allowing customers to buy luxury beauty brands’ products at its platform.

    At Rocket Luxury, customers will be able to purchase products of 16 high-end beauty brands from home and abroad, including Estee Lauder, MAC, Bobby Brown, and Hera, directly bought by Coupang.

    The products will be delivered through the “rocket delivery” service, which offers delivery service within 24 hours upon order.

    For members of Coupang’s paid subscription service, Wow, the company will provide free delivery and free return service.

    “Customers who use luxury beauty brands will be able to buy at Rocket Luxury with trust as it only provides genuine products certified by Coupang,” Lee Byeong-hee, the head of Coupang’s retail division, said.

  • Coupang to exit Japan to focus on Korea, Taiwan

    Coupang to exit Japan to focus on Korea, Taiwan

    Coupang has decided to withdraw its e-commerce business from Japan, 21 months after it began offering its online delivery service there, a company official said Sunday.

    “After testing our service as a pilot version, we have decided to withdraw our business from Japan,” a Coupang Japan official said.

    The Japanese daily, Nikkei, reported Saturday that Korea’s largest e-commerce firm will terminate its delivery service for fresh food and daily necessities in Meguro and Setagaya, Tokyo, on March 21.

    The company has been operating a quick commerce service that delivers online customer purchases within 10 minutes in the two cities.

    It has been selling nearly 5,000 grocery items on its shopping platform in partnership with local department store, Takashimaya and the dollar-store, Daiso.

    However, local consumers find Coupang’s service less attractive because Japan already has a strong convenience store business culture.

    Also, Japan has, by far, the highest senior population in the world and many of them are not used to shopping for groceries online. About 29.1 percent of its people are over 65 years old, according to Japan’s Ministry of Internal Affairs and Communications’ data, which was released in September 2022.

    Instead, Coupang said it will focus its businesses on Korea and Taiwan.

    The e-commerce firm introduced its Rocket Delivery service for Taiwanese customers last October. It provides local consumers the choice of buying hundreds of Korean items online through the direct-purchase service.

    Taiwan has a high population density and is an ideal environment to run an e-commerce business. Taiwanese consumers are also very interested in Korean products due to the influence of Korean popular culture.

    Coupang headquarters in Seoul confirmed the withdrawal of its business from Japan, but declined to comment further on the issue.

    Meanwhile, Coupang achieved record-high sales of 26 trillion won ($19.6 billion) last year. In the third quarter of 2022, the company turned out a surplus for the first time in eight years with its Rocket Delivery service.

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  • Coupang Swings to Profit in Q3, the First Since 2014

    Coupang Swings to Profit in Q3, the First Since 2014

    E-commerce giant Coupang said Thursday it swung to the black in the third quarter for the first time since 2014, when it introduced its ultra-fast delivery service, Rocket Delivery.

    Net income came to $90.7 million in the July-September period, compared with a net loss of $324 million during the same period of last year, the New York-listed e-commerce titan said in a regulatory filing.

    Coupang’s operating profit came to $77.4 million, marking the first positive figure since 2014. The e-commerce giant logged an operating loss of $67.14 million in the previous quarter.

    Sales grew 10 percent on-year to $5.1 billion in the third quarter.

    Coupang said sales of its product commerce division, which includes its Rocket Delivery service, also advanced 10 percent from a year earlier to $49.5 billion.

    The number of active customers inched up on-year by 7 percent, though the increase in spending per customer was slightly lower at 3 percent.

    The top line of its new business areas, including the food delivery service Coupang Eats and video streaming service Coupang Play, inched down 6 percent from a year earlier to $154.2 million.

    The company attributed its first net profit and operating income since 2014 to improved profitability, stemming from its continued investments in tech and efforts to optimize supply chain and business processes.

    The e-commerce behemoth said its adjusted earnings before interest, tax, depreciation and amortization (EBITDA) came to $195 million, compared with a deficit of $207.4 million last year.

    Coupang made its landmark debut on the New York stock market last year in an effort to expand its global presence.

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  • Coupang Q2 revenue soars on active customer growth

    Coupang Q2 revenue soars on active customer growth

    South Korean e-commerce company Coupang has reported surging revenues and profits on higher active customers during its 15th consecutive quarter of growth above 50 percent.

    But the company is still battling to stem losses thanks to investment into new business activities.

    Total net revenues rose 71 percent on a reported basis, or 57 percent on a constant-currency basis with the number of active customers up 26 percent year over year to 17 million.

    Revenue per active customer grew 36 percent.

    Coupang reported a gross profit of US$658 million, which would have been higher but for $158 million in inventory write-offs as a result of a fire at its Deokpyeong fulfillment center in Korea.

    Revenue from its Rocket Fresh division more than doubled, exceeding $2 billion, while the company’s Eats revenue nearly tripled during the past two quarters, with the loss per order down by more than 50 per cent year on year.

    Investments in Rocket Fresh and Eats accounted for almost the entire pre-tax loss of $122 million for the quarter, which the company said highlighted the profitability of its more mature business operations.

    In March, Coupang was valued at around US$109 billion after the company raised around $4.6 billion in its US IPO.

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  • Coupang faces probe into unfair trade practices

    Coupang faces probe into unfair trade practices

    After stoking a series of controversies, including a fire at a logistics centre and poor working conditions, South Korean e-commerce giant Coupang is now facing a government investigation into alleged unfair trading practices.

    The Korea Fair Trade Commission (KFTC) recently noted that Coupang might have violated the Fair Trade Law and carried out a field investigation at Coupang’s headquarters in Songpa-gu in Seoul late last month.

    Coupang has allegedly manipulated its search algorithm to make its private-label products more visible than the products of other suppliers.

    The company manipulated the algorithm towards prioritizing and placing its private-label products at the top of the search results while placing other products at the bottom.

    The antitrust regulator is also investigating whether Coupang conducted ‘gapjil’ against suppliers. Gapjil is a Korean term referring to power harassment and abuse of power.

    Coupang has allegedly required suppliers to offer their products at the lowest price and penalized those who refused to supply their products at a lower price than the supply price for other platforms.

    In the field investigation, the KFTC checked the allegations that Coupang forced suppliers to purchase advertising space and excluded those who refused to do so from various benefits, including the company’s rocket delivery service.

    Another allegation was that Coupang unfairly returned products to suppliers.

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