Coupang, Baemin expanding into MRO biz scorned by small merchandizers

[Photo by Han Joo-hyung]

South Korea’s e-commerce giant Coupang Inc. and top food delivery platform Baedal Minjok (Baemin) who have risen fast through their inventive business models have become threatening to merchandisers and merchants by penetrating to town business field with their dominant name value.

Interest groups of self-employed and small businesses including the Korea Stationery Distribution Cooperative, the Korea Federation of Small- and Mid-sized Merchants and the Korea Convenience Store Owners Association launched a coalition last week to stand up against online platform giants Coupang and Baemin for abusing their expansive presence and network to encroach into the field of supplies for maintenance, repair and operation (MRO) items, a field reserved for small and mid-sized enterprises.

Coupang has launched “Coupang Biz” last month, jumping into the B2B business for small-to-medium sized businesses shopping for office equipment and other MRO items.

The small business associations argue Coupang falls under the category of online retailer rather than platform operator and should become subject to related statutes as 91.9 percent of its sales are generated from direct purchase products delivered through its flagship next-day delivery service Rocket Delivery.

In July, Coupang was ordered by the Fair Trade Commission to correct articles for its Item Winner program, which exclusively exposes the cheapest and best-rated items among the same categories of products. The antitrust regulator found Coupang neglected to protect copyrights of sellers by allowing companies selling the same products to freely use images owned by others for promotion. The new rules have been in force since Sept.1.

Coupang denies any domineering practice, arguing it funded 400 billion won ($340.5 million) this year to support small business owners expand into digital markets. It backs its claim by adding that sales of small merchandisers trading at Coupang marketplace jumped 87 percent on year in the first half of this year.

Food delivery giant Baemin has been scorned for its B2B shopping mall “Baemin Sangheo,” through which Baemin has quickly risen as the leading MRO provider by offering food materials and other MRO products like disposable chopsticks at cheaper prices. Convenience store and supermarket owners also worry that Baemin’s instant delivery service B-Mart, which directly purchases and delivers groceries and daily necessities, could disrupt their sales.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]