Coupang’s threat to stop Rocket Delivery triggers public backlash

Coupang’s delivery trucks are parked in Seoul on June 13. Yonhap

By Lee Min-hyung

Coupang is facing growing public criticism over its threat to shut down its flagship delivery service Rocket Delivery, a gesture seen as an obvious power struggle against an antitrust regulator that consumers believe will ultimately harm their interests, subscribers to Coupang’s paid membership said on Tuesday.

Last week, the country’s largest e-commerce company was fined 140 billion won ($101 million) by the Fair Trade Commission (FTC) for allegedly rigging its algorithm to favor the sale of its own-brand products.

Coupang responded to the sanction by immediately releasing a statement saying that the company could no longer offer its customers the super-fast delivery service. The fines would cause the company massive inconvenience and losses.

But members of Coupang’s paid membership service Wow said the company’s countermeasures left much to be desired, as it appeared customers were being held hostage in the escalating exchange of blows between the two sides.

“Coupang appears to be exploiting customers to evade the sanctions imposed by the regulator,” said a user of Coupang’s Wow membership who wished to remain anonymous. “The company seems to be aware that its millions of loyal customers will have to endure enormous inconvenience due to the possible suspension of the service.”

Even though nothing concrete has been decided yet as to whether Coupang will actually stop operating the service in protest against the fine, the gesture itself is undesirable from the customers’ point of view, said the subscriber.

“Many Coupang subscribers in my area are unsettled after receiving the news,” said the Coupang subscriber. “The company gives the impression that it is threatening customers in order to gain a better position in the ongoing battle against the authority.”

Another Wow subscriber also expressed his discomfort with Coupang’s countermeasure.

“Many customers were already satisfied with the overall services of Coupang,” the user said. “But the services are not free, and besides, the company will increase the fee soon. The company makes money from the service, so it should no longer confuse customers with such warning messages to the regulator.”

The likelihood of Coupang eventually discontinuing the Rocket Delivery service is very low, as most of its customers would likely switch to other services if that were to happen. The unmatched delivery speed is the company’s core strength.

At the end of last year, the number of subscribers to Coupang’s paid Wow membership was around 14 million.