Gov't to approve Coupang's logistics business registration

Coupang's delivery vehicle makes overnight delivery on a road in Seoul, Nov. 2. / Courtesy of Coupang

By Kim Jae-heun

The government is likely to approve Coupang's application to register a logistics business by the end of this year.

“Every year we evaluate candidates based on whether or not they meet our requirements to start a courier business and Coupang is said to have passed all relevant standard and quality checks,” a Ministry of Land, Infrastructure, and Transport official said. “After proceeding with the remaining procedures, we will announce the list of successful applicants later this month.” The ministry is the authority in charge of issuing business licenses.

Coupang had already earned a license in 2018 but withdrew from the business last year after finding it difficult to handle the surging demand for its logistics services both internally and externally. Together with the growth of the e-commerce company, it saw an instant soaring of demand for delivery services on its own platform.

To better prepare for the logistics business, Coupang has invested 485 billion won into automated facilities over the past two years, including the adoption of artificial intelligence technology for its logistics centers and delivery system. Now, Coupang is expected to deliver about 500 million parcels per year.

This may affect current market shares in the logistics sector, which is dominated by CJ Logistics with 47 percent. Lotte Logistics and Hanjin Logistics follow far behind with a 13 percent market share each.

Coupang reportedly wants to actively handle external supplies in its delivery service plan. If the license is issued, Coupang will also deliver products from other shopping malls, not only its own platform.

In particular, Coupang has a competitive edge in overnight and refrigerated delivery services.

The e-commerce firm has promised to improve working conditions for delivery workers too, which is currently a hot issue.

A number of deliverymen here died this year from overwork amid uncontrollably increasing demand for parcel services and companie's reluctance to hire more workers.

Coupang said it will guarantee various benefits to its employees including a 52-hour workweek and employment insurance. Delivery workers will also be given at least 15 days vacation a year and be provided with expenses for fuel and mobile phones as well as retirement pay.

In addition, Coupang will hire 4,400 workers to sort parcels at its distribution centers, which is done by deliverymen at other logistics firms.

“There is no specific law for the delivery service currently which limits our role in monitoring the market. We hope Coupang's new standards for its delivery workers will affect those of others and improve overall standards,” a ministry official said.