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The Korea Herald
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THE INVESTOR
March 29, 2024

Retail & Consumer

Disgruntled Coupang Men slam Coupang

  • PUBLISHED :May 22, 2017 - 11:21
  • UPDATED :May 23, 2017 - 14:04
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[THE INVESTOR] The row between Coupang delivery workers, more widely known as Coupang Men, and the company regarding working conditions appears to be deepening amid wage cuts that are said to have been executed without explanation.

“The firm cut my wage from 3.1 million won (US$2748.23) to 2.5 million won this month,” one Coupang Man based in Jeonju, North Jeolla Province, told The Investor.




“I sued the CEO for cutting workers’ wages without attaining approval from a majority of the workforce,” said another worker from Changwon, South Gyeongsang Province.

The situation is worse for irregular workers, who earn less than the regular delivery workers. “My wages fell to 2.1 million won this month from 2.3 million won,” said one irregular worker in Gwangju. 


More work, less pay

Coupang was catapulted to No. 1 spot in the local e-commerce market with its signature “Rocket Delivery” service from 2014 that promised delivery within 24 hours. To make this possible, the firm hired over 3,600 Coupang Men.

Despite the critical role that these delivery people play, the company abruptly changed the wage system by changing the standards on which incentives were based, in March.

The change ended up slashing the wages of a number of Coupang Men -- The Investor was unable to confirm the exact number -- in May that triggered mass complaints that have since gone viral.

These employees suspect that the firm changed the wage system to cope with falling profits. In 2016, despite its reputation as the No.1 social commerce firm, Coupang posted an operating loss of 560 billion won. Expenses involved with the Rocket Delivery service were pinpointed as one of the main reasons for this loss.

Disgruntled Coupang Men say that in contrast to falling wages, their workload has increased.

“To cut costs, Coupang fired part-time workers, called “helpers,” who sort the packages for delivery locations. So in addition to delivery, we also have to do what these helpers used to do,” said the Coupang Man from Gwangju.

He claimed that firing the helpers is hurting the quality of Coupang’s delivery services.

“Because we are now shouldered with additional tasks, it has become harder to keep the delivery schedule,” he said. “I used to deliver the first package at 9 a.m. but after they fired the helpers, my first delivery has been delayed to around noon.”

Coupang has also changed rules so that consumers need to spend at least 19,800 won for free delivery, up from the previous 9,800 won.

The Coupang Men say that the firm refuses to listen to their concerns, and this attitude is forcing people to leave.


A few angry men?

The company denies that there are any problems. In fact, Coupang maintains that overall they are paying more to the delivery people. 


Coupang CEO Kim Bom



“Overall wages of the Coupang Men have actually increased. We are only trying to fairly evaluate all employees based on their contribution to the service,” Kim Mi-hwa, a Coupang spokeswoman told The Investor. She declined to give exact figures on employees got raises, and vice versa.

There is also criticism that the recent predicament at Coupang is due to a few Coupang Men out for revenge. “This is not a company-wide problem. It’s about a few disgruntled employees who are trying to get back at the firm for wage cuts,” said one industry watcher who wished to remain anonymous.

Coupang, created by Harvard Business School dropout Kim Bom in 2010, has been something of a legend in the industry due to its fast rise to fame. Sales have been solid, and in 2016, they surged 67.6 percent to 1.9 trillion won. But due to bad margins, the firm has been struggling with climbing deficit. Over the past two years, Coupang’s losses have reached 1.2 trillion won.

The slide is a concern for foreign investors as well, as many have been investing in Coupang’s future value. Japan’s SoftBank, for instance, invested US$1 billion in June 2015. Sequoia Capital and Black Rock invested US$100 million and US$300 million, respectively, in 2014.

The Coupang CEO also has come under fire for his management skills, with employees accusing him of misleading the workforce by claiming that the firm’s cash flow remains healthy, contrary to what the balance sheet shows.

Following the April earnings report, Kim urged employees to “continue on the road to innovation,” saying everything was under control.

By Song Seung-hyun (ssh@heraldcorp.com)

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