E-commerce industry faces drastic changes ahead of Coupang’s fee hike

Coupang’s delivery trucks are seen at a parking lot in Seoul, June 13. The e-commerce company plans to raise its monthly membership fee by 58 percent on Wednesday. Yonhap

Naver, Shinsegae set to benefit most from Coupang membership hike

By Lee Min Hyung

The nation’s e-commerce landscape is set for drastic changes amid Coupang’s planned membership fee hike of 58 percent on Wednesday, with influential shopping platform operators — Naver and Shinsegae — expected to benefit by attracting customers who cancel their Coupang subscriptions, according to data and industry officials, Tuesday.

Coupang charged 4,990 won ($3.63) for its WOW membership, but customers’ financial burden surges to 7,890 won following the Nasdaq-listed e-commerce firm’s decision to increase the fee.

Coupang is the dominant market leader with its number of monthly active users reaching 31.6 million as of July, according to data from market tracker WiseApp Retail Goods.

Industry officials raised the possibility that a number of Coupang’s current paying customers may discontinue the service and switch to other reliable platforms.

“The ultra-fast Rocket Delivery service was the key driving force for Coupang’s robust growth here, but other players, such as Naver and Shinsegae, also offer speedy delivery with diverse marketing benefits to woo more customers away from Coupang,” an official from a local e-commerce companies said.

The latest collapse of two once-popular shopping platforms, WeMakePrice and TMON, will also come as a boon for Naver and Shinsegae, according to the official.

“Customers are losing trust in medium-sized and small e-commerce platforms, and likely to turn to those operated by big companies on fears of the possibility of similar such incidents,” the official said. “Few would expect Naver or Shinsegae to follow a similar path as the two now-defunct e-commerce companies.”

Shinsegae Group’s online shopping arm, SSG.com, also achieved solid growth in attracting new customers last month. The company launched its grocery-focused membership service on July 15 with various promotional coupons. The number of the platform’s new users soared year-on-year by 40 percent for the first 10 days after the launch of the service, according to the company.

Naver Shopping, one of the nation’s most influential online open markets operated by the dominant portal firm here, is also widely expected to win more benefits from Coupang’s fee hike and the sequential collapse of WeMakePrice and TMON.

“Naver is estimated to obtain more than 40 percent in the nation’s online open market share,” said Lim Hee-seok, an analyst at Mirae Asset Securities. “Naver will be able to attract a gross merchandise value of over 2.5 trillion won by attracting sellers and customers from the ill-fated e-commerce firms.”