Consumers blame OTT service for Coupang membership fee hike

Coupang Play wins a bid to relay the Korean national football team's international matches exclusively online from 2021. Courtesy of Coupang

By Kim Jae-heun

Some consumers are urging Coupang to get rid of its money-losing over-the-top (OTT) service, which they blame for the planned price hike of online retailer's membership from 2,900 won to 4,990 won in June, according to industry analysts Monday.

Korea's largest e-commerce firm by sales raised the membership price for newcomers as of Dec. 30. Existing users were excluded from the price increase. However, after Coupang's operating loss accumulated to an all-time-high of over 6 trillion won in 2021, it decided to charge the same fee for everyone.

“I think the price of Coupang's membership became expensive because of Coupang Play, which I don't use. Most people already use Netflix or Disney Plus. I hope that Coupang stops operating its OTT service and instead, increase its membership price by small amount,” 33-year-old Jang said.

Coupang has been freezing its membership price since the launch of the program back in 2008. Its users enjoyed a variety of benefits from free delivery service to an unconditional refund system in 30 days and complimentary access to Coupang Play for 2,900 won until the recent price hike.

The creation of Coupang Play is partially attributed as the reason for why Coupang's operating loss went out of control, as the online retail platform has continued to invest in improving its content quality. Coupang is expected to make an additional 18.8 billion won of profit on a monthly basis after it charges the additional 2,090 won per person.

Coupang's OTT service came under criticism in early 2020, as it lacked original content to watch. The online retailer recently won the bid to broadcast the Korean national football team's international matches online, as well as the national football league's exclusive broadcasting rights for three years.

Coupang's OTT service still lacks both quality and quantity of original content, and the number of people signing up for the paid membership program decreased when it decided to increase the membership price.

According to the data analysis platform, Mobile Index, Coupang Play's monthly active users decreased from 3.58 million last December to 3.39 million in February.

“It is hard to say that 4,990 won is expensive for the many benefits that Coupang's membership offers. Coupang Play comes as a complimentary service and people cannot blame it for the price hike,” an industry official said.

Coupang refused to comment on the issue saying that doing so goes against the company's marketing policy.