Small sellers on Coupang squeezed by dynamic price policy, deflated sales on data leak

Coupang has become indispensable to not just customers but also small merchants in Korea, but that dominance has independent sellers feeling squeezed by pricing policies — stress compound-ed by a reduction in sales in the wake of the data leak.

The Coupang logo is seen on a delivery truck at a Coupang logistics center in Seoul on Dec. 29, 2025. [YONHAP]

Coupang’s scale has made it indispensable for many small merchants in Korea. That dependence, sellers say, has also left them little room to push back as the online marketplace enforces pricing and refund policies that shift financial risk onto vendors.

For many third-party sellers on Coupang, the pressure has intensified since the platform’s admission of a massive personal data breach in November of last year that exposed the personal information of 33.7 million users. Sellers say consumer traffic declined sharply afterward, and December sales fell even as marketing costs rose.

In interviews with 10 sellers who operate stores on Coupang, the JoongAng Ilbo found that average sales in December declined by 15 to 20 percent from the previous month.

One seller, who asked to be identified by the surname Shin and sells processed foods on the platform, recorded sales of 400 million won ($277,500) in December, down about 100 million won from November. Over the same period, advertising expenses increased by 5 percent to 50 million won. Despite the higher spending, average daily product exposure fell 3 percent and clicks dropped 11 percent.

Sellers say their margins are being squeezed further by Coupang’s automated pricing system, or dynamic pricing. The system uses AI to monitor the prices of competing online retailers and automatically lowers prices on Coupang to undercut them.

If a product listed for 10,000 won on Coupang goes on sale for 6,000 won at a rival shopping mall, Coupang’s system can immediately drop the price to 5,900 won, a difference of 4,100 won per unit.

A worker organizes Rocket Fresh delivery parcels in front of Coupang's logistics center in Seoul on Dec. 28, 2025. [NEWS1]

What sellers object to is who bears the cost of that difference, known as the discrepancy amount. For Coupang, merchants are responsible for covering it.

Competing platforms such as Kurly and 11Street also offer lowest-price matching programs, but they absorb the price difference themselves.

A seller surnamed Park, who generates annual sales of 200 million to 300 million won on Coupang, said they paid about 2.5 million won in discrepancy charges in November alone. With monthly sales averaging around 20 million won, more than 12 percent of that revenue went to covering the losses.

“When we first signed the contract, Coupang fixed a minimum percentage for margins,” Park said. “I thought [the discrepancy charges] were unfair, but Coupang accounts for such a large share of my sales that I had no choice but to accept them.”

The pricing policy has had ripple effects beyond Coupang itself. Sellers say they now avoid participating in discount campaigns on other shopping platforms, even when those companies offer financial support for marketing, because deeper discounts elsewhere can trigger higher discrepancy payments on Coupang.

A marketing manager at another online retailer said the shift has been noticeable. “In the past, sellers would plead with us to increase support,” the manager said. “These days, they often ask to be excluded from discount events. We later found out it was because of Coupang’s discrepancy charges.”

Harold Rogers, interim CEO of Coupang, answers questions from lawmakers during a hearing on the e-commerce giant's massive data leak and other practices at the National Assembly building in western Seoul on Dec. 31, 2025. [YONHAP]

Concerns over Coupang’s practices surfaced publicly this week during a joint parliamentary hearing on the e-commerce platform's data breach, trade practices and labor issues. Rep. Lee Ju-hee of the Democratic Party questioned whether the pricing system unfairly transferred losses to sellers.

Yoon Hye-young, a member of Coupang’s audit committee, responded that seller margins reflect “a standard practice in the industry for negotiating supply prices,” and that growth incentive payments operate “within the scope permitted by the Act on Fair Transactions in Large Retail Business.”

Joo Byung-ki, chairman of the Fair Trade Commission, said regulators would “take strict action immediately if any violations are confirmed, and they conduct ongoing monitoring to prevent similar practices from recurring" at the same hearing.

This is not Coupang's first time under the regulatory microscope. In 2017 and 2019, authorities issued corrective orders after determining that the company improperly shifted advertising costs to sellers and violated procedures related to sales incentive agreements.

The Coupang logo is seen at the company's logistics center in Seoul on Dec. 30, 2025. [NEWS1]

Sellers also point to the growing cost of customer returns as a major concern. Coupang’s paid WOW subscription allows members to return products without conditions and at no cost. That policy applies even to “Rocket Delivery,” for which merchants pay delivery fees themselves.

An estimated 250,000 sellers currently sell directly on Coupang. Many say the company frequently urges them to join its paid seller membership program, "Rocket Growth Saver," which costs 99,000 won a month. The program covers some return pickup and restocking fees, but sellers say unconditional refunds still leave them absorbing most of the cost.

A seller surnamed Han, who subscribes to the Saver program, said that of three refunds issued in December, only one item was actually returned. “I’ve never seen another shopping mall where sellers bear the full cost of unconditional refunds, including refund fees,” Han said.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom. BY CHOI HYUN-JU [kim.juyeon2@joongang.co.kr]