Coupang's express delivery ruled legitimate

By Yoon Sung-won

Coupang won the lawsuit against logistics firms regarding its express delivery service, according to the court, Thursday.

The Seoul Central District Court ruled this week that Coupang’s express delivery service, dubbed “Rocket Delivery,” does not violate any laws because it is only a part of the business selling products.

“A seller delivering products is not part of the ‘trucking transport business,’ as stipulated in the relevant law,” the court said.

In May last year, 10 logistics firms including CJ Korea Express, which are members of Korea Integrated Logistics Association, filed a lawsuit against the e-commerce company alleging that Rocket Delivery is illegal. Under the law, only licensed enterprises can run trucking transport businesses.

The association and its members argued that Coupang is providing a paid delivery service business using privately-owned cars, not business-use vehicles, without permission to run the trucking transport business.

The logistics firms also requested a court order for Coupang to stop the express delivery service.

The logistics firms claimed Coupang pretends to sell products but actually is only a broker for online merchants, running a business of express trucking transportation. But the court ruled in favor of Coupang.

“Considering the terms and conditions between Coupang and its partners, they are hardly just pro forma purchase contracts,” the court said. “It seems that Coupang is actually purchasing products from its partners to resell to the customers.”

An industry source said the court ruling may bring a change of landscape in the retail and logistics businesses.

“Many e-commerce businesses, except for Coupang, have assigned delivery tasks to their respective logistics partners,” the industry source said. “But this may change from now on because directly delivering the product can cost less.”