A vehicle is parked near a Coupang logistics center in downtown Seoul. (Yonhap)
SEJONG, Dec. 25 (Korea Bizwire) — South Korea’s Fair Trade Commission said on Thursday that major online platforms and retailers have sharply increased the financial burdens placed on suppliers, with Coupang emerging as one of the largest recipients of supplier-funded promotional payments.
According to a government survey of 40 major retailers across eight distribution sectors, Coupang collected an estimated 23.4 trillion won (about $16 billion) in sales promotion fees and incentives from suppliers in 2024—roughly 10 percent of the value of goods it purchased directly from vendors. The figure comes amid heightened scrutiny of the e-commerce giant following recent mass personal data leaks.
The findings were released by the Fair Trade Commission, which examined commission rates, sales incentives and additional costs imposed on suppliers by department stores, online platforms, big-box retailers and other distributors.
Coupang, which shifted entirely to a direct-purchase retail model in mid-2023, earned profits by reselling goods at a markup but also collected substantial ancillary income through advertising fees, promotional spending and sales incentives. Suppliers paid about 5.8 percent of transaction value for promotions and an additional 3.7 percent in sales incentives—higher than the industry average for online marketplaces.
Overall, online shopping platforms posted the highest sales incentive ratios among retail sectors, with supplier-paid incentives rising to 3.5 percent of transaction value in 2024, up from 3.2 percent a year earlier. Convenience stores and big-box retailers also recorded increases, while TV home shopping channels raised their commission rates outright.
Coupang’s data breach undetected for five months, triggering customer alarm (Yonhap)
The survey found that suppliers face additional costs beyond commissions and incentives, including logistics fees and promotional expenses. These extra charges accounted for nearly 5 percent of transaction value at online platforms and more than 8 percent at convenience stores.
Offline retailers imposed heavy renovation costs on tenants as well. Department store suppliers reported an average of nearly 28 interior remodels per store last year, with per-renovation costs rising sharply to more than 100 million won at some outlet malls.
The report also highlighted disparities affecting small and midsize suppliers. Retailers charged them commission rates averaging 3.2 percentage points higher than those applied to large corporations, a gap that remains pronounced in online platforms, specialty retailers and outlet malls despite some improvement from the previous year.
CJ Olive Young, a major cosmetics retailer benefiting from the global popularity of K-beauty, stood out for especially high commission and incentive rates in both its online and offline operations, well above industry averages. The company also charged information provision fees to nearly all of its suppliers.
The Fair Trade Commission said it would intensify monitoring of retail practices and closely examine whether promotional fees and other charges constitute unfair trade behavior.
The investigation was conducted between March and November and reflects the Democratic Party–led government’s broader push to rein in dominant platforms and strengthen protections for smaller suppliers in South Korea’s retail ecosystem.
Ashley Song (ashley@koreabizwire.com)
