Coupang, Korea's leading logistics company, the biggest crisis? Was there a reason for Masayoshi Son's stock sale last year?

Coupang, who recorded a big deficit, is suffering from internal trouble and outside aggression(內憂外患). Responsibility for ESG, falling stock prices...

In September last year, Vision Fund, sold 57 million shares of Coupang.

This is about one-tenth of the existing 36.8% stake, with a sale price of $1.6 billion, which means that it earned nearly half of the existing investment of $3 billion.

Chairman Masayoshi Son says he believes in Coupang's saint, but in reality, it is clear that it is meaningful to sell a considerable amount of shares before the announcement of the deficit.

Coupang's stock price, which recorded its largest sales since its foundation, is plummeting 

A big reason for the fall in stock prices is that the deficit is larger than sales. Coupang posted a net loss of $1.5 billion last year alone. Considering that the net loss last year was $463.1 million, the loss increased by 3.3 times. It is also the biggest deficit considering the cost of the fire at the Deokpyeong Distribution Center last year.

<Deokpyeong : Map Link>

Coupang violated fair trade in Korea

According to the Fair Trade Commission, Coupang issued a contract to consumers who purchased the product through its brokerage trading platform "Market Place," indicating that it was not a product seller. According to the current e-commerce law, if a business operator "intermediates" a transaction between a product seller and a consumer issues a contract to a consumer who purchased the product, he or she must write in the contract that he or she is only an intermediary and not a party who sold the product.

Coupang issued a contract to consumers who purchased the product through its brokerage trading platform "Market Place" and did not indicate that it was not a product seller.

At the bottom of the contract, the "Coupang" logo was marked, making it easy for consumers to misunderstand that their counterparty was Coupang, the FTC explained.

The Fair Trade Commission judged that Coupang's actions hindered the exercise of its rights by confusing who the other party (product seller or contract partner) could be held responsible for when consumers who purchased the product asked for a return or refund.

What is the problem?

1. Coupang belittle social responsibility?

Since March 2020, safety insensitivity and poor working conditions have occurred one after another, including the death of nearly 10 workers, the COVID-19 mass infection of workers at the Coupang Distribution Center in 2020, and the fire at the Coupang Deokpyeong Distribution Center in June 2021. 

In addition, Coupang secured big data on the demand for products through the efforts of sellers. After attracting consumers, the highest operating profit products are purchased or manufactured and sold directly, and only products with low returns are supplied to small and medium-sized sellers to the open market.

2. Is it a problem caused by unreliable leadership?

Coupang also causes controversy over corporate governance issues. In May this year, Chairman Kim Bum-seok, the actual ruler, was excluded from the designation of the same person for reasons such as nationality, raising controversy over preferential treatment and equity. In particular, five hours after the fire broke out, he announced the resignation of Chairman Kim Bum-seok, let alone apologizing for the fire incident.

3. Is it a side effect from short-term growth?

Coupang uses Amazon as its role model and imitates success tactics. Rather than making profits, it is similar to investing aggressively in sales, market share expansion, and vertical integration.

In other words, behind Coupang's rapid growth and dramatic listing in the U.S. stock market, there are dark aspects of "labor exploitation," "consumer deception," and "unfair behavior."

What do Koreans think? and ESG?

It should be said that Koreans' thoughts on Coupang are very complex and subtle.

They admit to providing good service. This is because it has the advantage of being able to buy a rocket delivery system in Korea (delivery completed within one to two days of ordering) and various items cheaply.

However, the social image of a company is very bad. This is based on questions about employee human rights, sprinkler malfunction in the event of a fire at a distribution center, and negative public opinion in various news.

Coupang, which has even been listed on the New York Stock Exchange, may now need time to strengthen its internal stability in order to grow further in the future. Coupang's ESG is currently insufficient.