Coupang Eats Accused of 'Loss' Hypocrisy: Merchants Demand Fee Cuts Amidst Growth Claims

Coupang Eats, a prominent player in South Korea's food delivery market, finds itself at a critical juncture, caught between its global image as a growth-oriented tech giant and its domestic operations facing increasing scrutiny from merchants. While Coupang proudly showcases its revenue growth, particularly in its 'growth business' segment which includes Coupang Eats, to international investors, it simultaneously cites opaque 'losses' to justify its refusal to lower commission fees for merchants. This dual approach has ignited significant backlash from small business owners and industry associations.

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There is no way to confirm that the increase in Wow subscription fees is not flowing into Coupang Eats. Repeating only the word 'loss' without disclosing specific indicators is just a justification to avoid the responsibility of mutual growth.

The core of the dispute lies in transparency. Coupang Eats argues that its free delivery promotions for Wow Membership subscribers are a significant financial burden, leading to operational deficits. However, the company has consistently failed to provide concrete, separate financial data for its food delivery arm. Its parent company, Coupang Inc., consolidates Coupang Eats' performance within a broader 'growth business' category in its US SEC filings, alongside ventures like Farfetch and its Taiwan operations. This lack of granular financial disclosure makes it difficult for external parties, including merchants and regulators, to independently verify the extent of Coupang Eats' losses and assess the validity of its fee-cut refusal.

Merchants, represented by groups like the Euljiro Committee of the Democratic Party, contend that Coupang Eats' strategy is a calculated move to solidify market dominance. They argue that the company is strategically incurring costs to capture market share, a common tactic in the tech industry, and then leveraging the resulting 'losses' as a reason to avoid concessions domestically. This narrative is further fueled by the fact that Coupang Eats has reportedly increased the delivery fee burden on merchants while simultaneously advertising a '0 won' delivery fee for customers. The company's defense, citing its 'mutual growth plan' which supposedly lowered commission rates while increasing delivery fees, is viewed by many merchants as a 'survival fee plan' rather than a genuine effort towards shared prosperity.

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Merchants pay 3,400 won for delivery per order, but we don't get the difference back even for short distances (delivery fees in the 2,000 won range). Isn't the rest of the money Coupang Eats' profit?

From a local perspective in South Korea, this issue touches upon broader concerns about the power dynamics between large platform companies and small businesses. The perceived disparity between Coupang's outward projection of success and its internal justifications for maintaining high fees raises questions about corporate responsibility and fair competition. While Western media might focus on Coupang's impressive growth figures and its challenge to established players, the Korean perspective emphasizes the impact on local merchants, the lack of transparency, and the potential for market monopolization. The Hankyoreh, as a publication often critical of corporate power, highlights this discrepancy, urging for greater data transparency and a more equitable approach from Coupang Eats.

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We are not passing on the cost of the Wow member delivery fee 0 won promotion to the merchants, and we have not increased the delivery service commission rate.