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Coupang to invest W3 tril. to expand logistics network
Coupang's rocket delivery service coverage will extend to further coastal, mountainous and rural countrysides as it invests 3 trillion won in expanding its logistics infrastructures by the end of 2026. Courtesy of Coupang
By Ko Dong-hwan
Korea's largest e-commerce firm plans to provide 'rocket' delivery to all areas by 2027
Coupang will extend its free, one-day "rocket" delivery service network throughout almost the entire country by investing more than 3 trillion won ($2.2 billion) to expand its logistics infrastructure by the end of 2026, the country's biggest logistics firm said Wednesday.
In particular, the upgrade will help residents in rural areas that often don't have access to supermarkets nearby or other shopping options by allowing them to shop online and have their orders delivered the next day without any delivery fee. These remote regions will also benefit from the company's investments as rural areas, experiencing an increase in the number of older adults, will likely start to attract more young people with new employment opportunities at local logistics centers that will be built.
Coupang is rolling out its rocket delivery service to 182 out of 260 cities and counties nationwide, thereby covering 70 percent of the country. The company's goal is to extend service coverage to 230 cities, counties and districts starting in 2027 to serve more than 50 million people nationwide.
The company will build eight new local logistics depots, known as fulfillment centers, to expand the coverage to coastal and mountainous regions where making deliveries can be hard within such a time frame. They will be introduced in Gimcheon, North Gyeongsang Province; Jecheon, North Chungcheong Province; Icheon; Cheonan, South Chungcheong Province; Daejeon, Gwangju, Busan and Ulsan.
New fulfillment centers in Gwangju and Daejeon will be completed and will commence operations later this year, while the rest are scheduled to begin construction this year. The new fulfillment centers are expected to hire nearby residents.
Most of the regions to be covered by Coupang's new rocket delivery service network are among the 89 areas designated by the Ministry of the Interior and Safety as having the most serious population declines — defined as a local community reduced to 30,000 residents or less — due to the aging population and low birthrate. While the company currently caters to 17 of them, the upgraded delivery capacity will start covering more than 60.
The delivery service coverage expansion is expected to bolster regional economies. The company last year launched the rocket delivery service to Dogye Township in Samcheok, Gangwon Province, where there are no big stores and residents have to ride for 30 minutes to get to the nearest one. The new service prompted the residents to place over 5,000 delivery orders each month. Sasong New Town in South Gyeongsang Province also saw the launch of the rocket delivery service last June amid insufficient shopping options. It drew 1,000 to 1,500 orders each day.
"Coupang's expansion of rocket delivery service coverage is not just raising the quality of life but also playing a critical role in bolstering local economies by boosting sales and creating jobs," a finance management professor at Hanyang University said. "Remote rural areas, long referred to as delivery blind spots, will particularly benefit from the new service. It will help those regions become more attractive, overcoming the aging population and low birth problems."