Coupang ups stake on delivery system

Coupang CEO Kim Bom speaks during a press conference at the Westin Chosun Hotel, downtown Seoul, Tuesday. The e-commerce site said it will invest 1.5 trillion won over the next two years to expand its logistics network. / Courtesy of Coupang

e-commerce firm vows to hire more workers, build more warehouses

By Lee Hyo-sik

Coupang, Korea’s leading e-commerce site, will invest 1.5 trillion won ($1.3 billion) over the next two years to expand its delivery network to stay ahead of its rivals, WeMakePrice and Ticket Monster, the company CEO said Tuesday.

The company plans to increase the number of its delivery personnel and build more warehouses to get products more quickly and safely to customers.

“Since we launched our own delivery system, Rocket Delivery, in March 2014, we have been investing significantly to expand it,” Kim Bom said at a press conference, Tuesday. “We will increase the number of our delivery personnel to 40,000 and operate 21 warehouses across the country by 2017.”

Currently, Coupang has about 3,500 delivery workers, and 6,000 more at its logistics and customer service centers. It also runs 14 warehouses.

“We hire mostly people in their 20s and 30s, who are desperately seeking a job, as delivery personnel. We have been creating as many decent jobs as Hyundai and other large companies have for young jobseekers,” Kim said. “New recruits normally undergo a six-month-long provisionary period. If they are qualified to deliver Coupang’s value to our customers, they will be hired as a full-time employee. Even during the provisionary period, they get the same benefits as our regular workers.”

The CEO then said its investments to build warehouses nationwide have had positive economic effects on regions in which the facilities are located.

“We seek to build Korea’s most extensive, efficiently-operating nationwide logistics network. Through Rocket Delivery, we can offer customers the fastest and the most reliable delivery services in the country,” Kim said. “This revolutionary service has greatly boosted customer satisfaction.”

Coupang has been at odds with logistics companies over its Rocket Delivery. Delivery service companies have been filing complaints with government agencies against the e-commerce site, arguing that the latter’s delivery service violates the nation’s Transport Services Act.

The Korea Interland Logistics Association (KILA), which represents the interests of logistics firms, insisted that Coupang violated the law by operating a parcel delivery service without a license.

Following the accusation, the company stopped charging fees to customers who purchase goods worth less than 9,800 won in May and began delivering parcels only worth more than 9,800 won for free.