Coupang Moves to Cut Losses by Raising Service Charges | Be Korea-savvy

Coupang Moves to Cut Losses by Raising Service Charges

A file photo of a Coupang logistics center (Yonhap)

A file photo of a Coupang logistics center (Yonhap)

SEOUL, Jan. 4 (Korea Bizwire)South Korean e-commerce giant Coupang Inc. has been focusing on an offensive strategy to bulk up while tolerating losses, but recently began raising service charges as part of efforts to make a strategic shift.

The company raised monthly subscription fees for Wow membership from 2,900 won (US$2.43) to 4,990 won last Thursday, applying the fee only to new subscribers.

It is the company’s first raise since the subscription service was first introduced in 2019.

Coupang Eats, an online food platform under Coupang, replaced its commission discount programs for restaurant members with proportional service charges, resulting in a de facto increase to its service commissions.

Experts argue that Coupang, which has been under a lot of pressure to turn a profit since the company was listed on the New York stock market last March, is beginning to take measures to improve its profitability.

There are estimated to be more than 5 million Wow membership subscribers currently. Considering the increasing number of customers loyal to Coupang, the company expects that higher subscription fees may partly resolve its issues with profitability.

The financial windfall from the higher subscription fees depends on how many consumers and restaurants cancel their membership in protest.

“Expanding the proportion of sales from additional services may help improve the company’s financial circumstances, but it is still expected to fall short of reaching profitability,” Kiwoom Securities analyst Park Sang-joon said.

Ashley Song (

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