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THE INVESTOR
December 12, 2019
Big Reunion

Retail & Consumer

Coupang goes after LG H&H in supply feud

  • PUBLISHED :July 02, 2019 - 15:36
  • UPDATED :July 02, 2019 - 15:36
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Korean e-commerce firm Coupang on July 1 unveiled the price list of products supplied by LG Household & Health Care, saying it was almost a third higher than the average of its other suppliers.

According to the data that Coupang provided to lawmakers, LG H&H supplied its baby milk product Bebience Mountain Goat Liquid Formula at 18,400 won ($15.82), which is said to be 27 percent higher than the consumer price of its competitor. The company also sold Coca Cola’s Minute Maid Grape Juice at 25,964 won, 15 percent higher than competitors. Coca Cola Korea is an affiliate of LG H&H, and the LG unit is its local distributor.




“Revealing one’s own supplier’s price does not go against the country’s fair trade regulations. But if Coupang had signed a contract to keep the figures confidential, it could be a problem,” the Fair Trade Commission official Shin Dong-ryul told The Investor.

The data comes after Coupang on June 28 formally refuted allegations that it has mistreated LG H&H. “We decided to take action after seeing that the LG H&H complaint is causing confusion among our other suppliers and customers,” Coupang said in a statement.

The e-commerce firm was referring to a complaint that LG H&H filed with the FTC on June 5 about being mistreated by Coupang. It is one of Coupang’s suppliers. The antitrust agency has started reviewing the case.

LG H&H’s claimed that e-commerce firm broke the law by forcefully canceling products that Coupang found to be less popular. As an example, it cited 400,000 won worth of products it was to supply Coupang. The e-commerce firm, however, says “everything was done according to the protocol,” stressing that it notified the LG unit of the cancellation three days prior to the supply date.

Industry watchers say that the latest development is part of a bigger issue.

“Coupang stopped receiving LG H&H supplies, mostly those involving daily products and of the Coca Cola brand altogether, and that’s at the core of this argument,” said one market insider, declining to be identified.

He added that Coupang refused to negotiate the supply terms, including the price. LG H&H, however, claims that Coupang is blowing the issue out of proportion and that it never meant for it to be publicized in the first place.

Last year, LG H&H posted revenue of 6.7 trillion won, of which only 1 percent came from Coupang, which logged 4.42 trillion won of revenue. As of this month, the LG unit is not supplying any of its products to Coupang.

Coupang is also denying claims of LG H&H that it forced the LG unit to shoulder unnecessary advertisement fees.

Besides LG H&H, several others such as Woowa Brothers and WeMakePrice have filed complaints against Coupang on similar charges.

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

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