How far a company’s arrogance can go

It is time to look back on the management’s perception of Korean consumers and market, because consumers’ minds always change.

PARK SURYONThe author is head of the industry news department at the JoongAng Ilbo. “If the Fair Trade Commission (FTC) bans Coupang from recommending Rocket Delivery items, the current Rocket Delivery service will no longer be available.” Coupang made this statement immediately after being fined 140 billion won ($101.4 million) by the FTC on June 13. It also canceled the groundbreaking ceremony of the Busan High-tech Logistics Center scheduled for June 20.

The public’s response was cold. Many people find it unpleasant that Coupang was threatening consumers with Rocket Delivery. It seems that not many paid members are leaving Coupang right away because many use it because they need it. But they will leave when Rocket Delivery is discontinued.

Did Coupang not know about that response? Coupang has a legal, public affairs and PR organization of three-digit numbers. The government once targeted Chinese e-commerce platforms to require them to acquire the KC certification for safety, only to face backlash from the public. If Coupang expects the same backlash, that’s a miscalculation. Instead, consumers have realized that Coupang does not beg for consumers’ love anymore.

If the government’s administrative action is unfair, it is right for companies to actively refute and demand improvements of the system. The extent of online platforms displaying private brand (PB) products can be disputed in court. That’s what administrative litigations are for. Recently, there have been multiple cases that the FTC’s decision against companies were overturned in administrative litigation.

Despite the existence of such procedures, Coupang arrogantly tells its consumers to “prepare for inconvenience,” thinking that the country would not work without Rocket Delivery. When Coupang increased its paid membership fee by 58 percent, it was confident that 14 million paid members would not leave. But this time, the company went too far. It left the impression that Coupang may be the embodiment of Machiavellianism in the digital market. It seems that the company is maintaining relationships with customers through needs and fear, not love and empathy.

As Coupang didn’t start its business yesterday, it needs to calculate wisely. If it stops investments and Rocket Delivery in Korea, who loses? There are many retailers who are aiming at the chance to step in if Coupang’s Rocket Delivery is halted.

Coupang doesn’t have any substantial business overseas. Mother company Coupang Inc. is listed on the New York Stock Exchange, but Coupang is a local company that makes most of its revenue in Korea. In 2023, for instance, the company earned $24.4 billion here. Coupang can only count on the Korean market and would not want to establish itself as a target of hate. It is time to look back on the management’s perception of Korean consumers and market, because consumers’ minds always change.