Coupang to strengthen health food business with new CEO
By Kim Jae-heun
CPLB CEO Chun You-won
E-commerce giant Coupang has appointed a pharmacist as the new co-CEO of Coupang Private Label Business (CPLB), part of its plan to expand into the “functional food for health” sector. CPLB is Coupang's subsidiary in charge of selling private brand health food, dietary supplements and skincare products.
The size of the local functional food for health market ― which includes herb-based health foods and supplements that are supposed to be good for people's health ― grew to more than 5 trillion won last year, but the products are mainly sold offline. The e-commerce firm wants to bring a portion of them online to boost CPLB's business, while having the new co-CEO, Chun You-won, review whether the products are eligible for sale.
Chun built her career at Pfizer Korea for eight years from 2012 to 2020, liaising with the government on registering licenses for drugs and dietary supplements. She also took the same job for a year at British pharmaceutical company GSK's affiliate before moving to Coupang.
Functional foods for health have promising growth potential, but at the same time are subject to high government regulatory risks. Starting this year, companies selling unapproved dietary supplements, as well as their CEOs and retailers, will potentially face heavy punishments.
Coupang outsources its manufacturing of medicines and heath foods to overseas firms, but it is responsible for checking product safety before selling them.
The firm launched its private brand for dietary foods, Vita Halo, in 2019, and sells a variety of products, including medical supplies, herbal medicines, health supplements and cosmetics. In 2020, the subsidiary's sales and net profit marked a respective 133.1 billion won ($110.9 million) and 1.5 billion won ($1.25 million).
Many e-commerce firms start their business with open market services and then ultimately introduce in-house brands when they attract a strategic number of loyal customers. This move is because private brand items provide better margins than those of other brands.
Coupang started with daily necessities and then diversified its products into fashion items and household appliances, and now health supplements.
The company said that it could not comment yet on the plans for CPLB.