Coupang under fire for supplier treatment, data leak

Kim Bom-suk, founder of Coupang and chairman of Coupang Inc., has submitted another written explanation for his absence from a joint parliamentary hearing scheduled for Dec. 30 and 31, following the leak of personal data involving 33.7 million people. He also failed to attend a parliamentary hearing on Dec. 17, citing business obligations as the chief executive of a global company operating in about 170 countries. However, Coupang’s management practices point to a narrow focus on profit maximization while neglecting ethical responsibility, raising doubts about whether the company meets the standards expected of a global corporation.

According to the Fair Trade Commission, Coupang collected about 2.3 trillion won last year from suppliers under the names of sales promotion fees and sales incentives. This amounted to roughly 9.3 percent of total transaction values, meaning Coupang collected an average of about 100 million won per supplier. Sales promotion fees cover advertising and discount coupon costs, while sales incentives are performance-based payments tied to sales volume. Critics argue that the company has exerted pressure on small and financially vulnerable suppliers eager to gain access to Coupang’s dominant marketplace.

Delayed payments to suppliers have also become routine. An analysis by the Fair Trade Commission of payment practices at 111 distribution companies found that Coupang took an average of 52.3 days to pay suppliers in direct purchase transactions, nearly double the industry average of 27.8 days. Charging high fees while repeatedly postponing payment settlements exemplifies textbook unfair trade practices. Analysts say Coupang has been able to aggressively expand its logistics centers and invest in its Rocket Delivery service by securing cash at the expense of suppliers, many of whom are small business owners.

Coupang has repeatedly sought to evade responsibility in the wake of serious incidents, including the fire at its Deokpyeong logistics center and a series of deaths among delivery and warehouse workers. The company has also faced accusations of attempting to conceal industrial accidents. It has leveraged its dominant market position to impose unfair trading terms on sellers and suppliers. After leaking the personal data of nearly the entire population, Coupang is now attempting to absolve itself through what critics describe as a self-conducted investigation. Although 90 percent of its revenue comes from South Korea, the company has focused primarily on responding to shareholder class-action lawsuits in the United States, downplaying the harm suffered by domestic users. Few global companies would tolerate such an unethical corporate culture, and management practices that stray from basic principles of integrity remain Coupang’s greatest risk.