A Coupang logistics center in Seoul (Image courtesy of Yonhap)
SEOUL, Jun. 17 (Korea Bizwire) – In a bold move that has sparked speculation in South Korea’s e-commerce industry, Coupang, the country’s largest online retailer, has hinted at the possibility of suspending its much-lauded “Rocket Delivery” service.
This threat comes in the wake of the company being slapped with a record 140 billion won fine by the nation’s Fair Trade Commission (FTC).
According to industry sources, Coupang has canceled a groundbreaking ceremony scheduled for June 20 at a new logistics center in Busan and has temporarily halted planned investments.
The company swiftly announced its intention to file an administrative lawsuit challenging the FTC’s ruling, signaling its reluctance to make additional investments until the regulatory uncertainty is resolved.
Within Coupang, which is listed on the New York Stock Exchange, there are growing concerns that the hefty fine imposed by the South Korean government could hamper foreign investment.
The penalty is seen as a potential deterrent for overseas investors, introducing an element of unpredictability in the company’s home market.
In a filing with the U.S. Securities and Exchange Commission (SEC) on June 14, Coupang Inc. stated, “The FTC has determined that Coupang’s search and ranking methods, which are consistent across all e-commerce operators in Korea and abroad, violate Korean law.”
The company added, “We intend to vigorously challenge the FTC’s decision in court.”
Other e-commerce players that have prominently displayed their private-label products are also concerned about potential spillover effects.
The FTC has announced its intention to monitor unfair consumer inducement practices in the online shopping market.
The company’s expansion of its Rocket Delivery service to cover 80% of all cities, counties, and districts nationwide, along with a broader range of direct-purchase items, has been instrumental. (Image courtesy of Yonhap)
Since the FTC’s announcement on June 13, Coupang has released multiple statements, adopting a combative stance against the regulatory action. While suspending its iconic “Rocket Delivery” service would be an extreme measure, industry analysts view its actual implementation as unlikely.
Some interpret Coupang’s threats as a public opinion battle, leveraging the potential inconvenience to its 14 million paid subscribers as leverage against the FTC.
Over the past decade, Coupang has invested approximately 6.2 trillion won in building over 100 logistics facilities nationwide to support its “Rocket Delivery” service.
An industry insider commented, “It’s hard to imagine Coupang, which has grown through ‘Rocket Delivery,’ abandoning it. The company’s eagerness to sway public opinion in this battle against government agencies is evident.”
Ashley Song (ashley@koreabizwire.com)
