South Korean e-commerce leader Coupang has announced the launch of Coupang Play, an on-demand video streaming service.
Initially available for Android OS users, Coupang Play will be free for the company's Wow membership subscribers, with plans to expand the service to iOS users, tablet devices, smart TVs, and dedicated PC versions.
Netflix dominates the South Korean OTT market with a 40% share.
Coupang Wow Membership has 5 million subscribers. If 90% of them adopt Coupang Play, the platform could become the most significant OTT player in the country.
The challenge for Coupang will be to match the content offerings of competitors such as Watcha and Wavve.
In the future, Coupang plans to produce its content called "Coupang Play Original."
The primary goal of Coupang Play is to strengthen the company's e-commerce business, following a model similar to Amazon.
Coupang has 18 million users, but only 5 million are Wow members.
If the company can attract 50% of non-Wow members, it could generate an additional KRW 226.2 billion (US$205 million) in revenue.
This would require content sourcing and IP rights purchases, but the potential financial gains are significant.
Coupang's main competitor, Naver, has recently made strategic moves through stock exchanges with CJ Logistics, CJ EnM, and Studio Dragon to strengthen its logistics and content capabilities.
Coupang's launch of Coupang Play directly responds to Naver's actions, aiming to increase customer loyalty and improve its e-commerce platform.
The launch of Coupang Play comes as the company prepares for an IPO on the NASDAQ.
Therefore, reducing the deficit is a critical issue. In addition, if Coupang can offer differentiated content compared to Netflix and other OTT services, the KRW 2,900 subscription fee could be a strong selling point for users.
The gaming feature, which has yet to be launched, will also play a crucial role in determining the platform's success over the next six months.