Coupang increases user base after subscription fee hike

[Photo by Yonhap]

Coupang, South Korea’s largest e-commerce platform, successfully increased its user base in August 2024 despite a controversial 58 percent hike in subscription fees. While the increase sparked some backlash, many customers seemed to feel that the price was still within a reasonable range. Meanwhile, China’s AliExpress emerged as the biggest beneficiary amid the decline of local competitors TMON and WeMakePrice, showing a strong growth rate of over 7 percent compared to the previous month.

According to data from mobile app analytics service Wiseapp Retail Goods on Monday, Coupang had over 31.83 million users in August 2024, up 0.5 percent from the previous month. This growth occurred despite the company raising its membership fee from 4,990 won ($3.72) to 7,890 won on August 7th.

The retail industry initially expected a significant wave of customer cancellations due to the fee increase, particularly given the ongoing economic downturn. Some online communities even saw a flurry of posts from users declaring they were leaving Coupang.

But the slight increase in user numbers suggests that some consumers still see the benefits of Coupang’s membership as outweighing the cost. One Coupang user in their late 30s shared, “When I buy clothes, I order about seven items, keep the ones that fit, and return the rest. Considering the free shipping and returns, I am willing to pay up to 10,000 won per month.”

In the same period, AliExpress saw its Korean user base grow to over 9.07 million, making it the second-largest online shopping platform in the country. The platform’s user numbers rose by 7.2 percent from the previous month. The decline of local rivals TMON and WeMakePrice, which have struggled to maintain normal operations, appears to have driven consumers to AliExpress. AliExpress’s continued zero-commission policy for sellers has also attracted many vendors who previously used TMON and WeMakePrice.

For its part, Temu, another Chinese e-commerce platform that competes on price, saw a decline of more than 8 percent in users. The continued concerns over the safety of products sold by Chinese companies and Temu’s weaker customer service presence in Korea compared to AliExpress are seen as key factors in this decline.