Skip to content

Coupang Set to Enter Logistics Market, Poised to Disrupt Industry Dominance

Source: Coupang

According to a report by Chosun Biz, south Korean e-commerce giant Coupang is preparing to re-enter the logistics market after receiving internal approval from the Ministry of Land, Infrastructure, and Transport.

With a capacity to handle about 500,000 boxes per year, the South Korean government expects Coupang's entry to disrupt the stable logistics market.

Currently, CJ Logistics dominates the market with a 47% share, followed by Lotte Global Logistics and Hanjin Logistics with 13% each.

The government regulator has completed its review of Coupang's submitted business plan and conducted an on-site inspection, confirming that Coupang meets the required capabilities for logistics services.

Coupang's entry into the logistics market is expected to positively impact its financial structure in the medium to long term.

Like Amazon's "Fulfillment by Amazon" model, Coupang's business plan includes a program for third-party sellers called "Coupang Partners."

However, unlike Amazon's model, Coupang does not charge for logistics costs due to regulations.

The move could lure third-party sellers away from CJ Logistics, which works with sellers on platforms like Naver SmartStore and eBay Korea.

In October, Naver, a major e-commerce player, signed an exchange agreement with CJ Logistics.

Since the market for third-party sellers is larger than the one Coupang currently focuses on, the logistics license application is part of a broader plan.

By entering the logistics market, Coupang aims to leverage its capacity and capabilities to challenge the established dominance of the industry and create a more competitive landscape in South Korea.