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Coupang / Rocket Delivery to Expand Nationwide by 2027, 'Even Remote Islanders Have the Right to Cuse'

2024/04

Rocket Delivery to Expand Nationwide by 2027, 'Even Remote Islanders Have the Right to Cuse'

Building FCs, introducing state-of-the-art logistics automation, and investing 3 trillion won in upgrading delivery networks

2024/04

As so-called C-commerce (China + e-commerce) companies such as Aliexpress and Temu are rapidly encroaching on the Korean market with their ultra-low-cost strategies, Coupang is responding by expanding its 'Coupse Right'.

Coupang announced that it will invest more than 3 trillion won ($3 billion) in logistics infrastructure by 2027 to expand rocket delivery across the country. This is seen by the industry as a counterattack to Aliexpress' investment of about 260 billion won to build a 180,000-square-meter logistics center in Korea, with a total investment of 1.5 trillion won.

By 2026, Coupang will build and invest in new fulfillment centers (FCs) in more than eight locations, including Gimcheon, Gyeongsangbuk-do, Jecheon, Chungcheongbuk-do, Busan, Icheon, Gyeonggi-do, Cheonan, Chungcheongnam-do, Daejeon, Gwangju, and Ulsan. The new FCs are scheduled to begin construction in the second quarter of this year in Busan and Icheon FC, in the third quarter in Gimcheon FC, and in the fourth quarter in Jecheon FC in Chungcheongbuk-do.

Through this investment expansion, Coupang will gradually increase the number of rocket delivery areas across the country, with the goal of delivering to virtually 100% of the country's population by 2027. Currently, Coupang is implementing rocket delivery in 182 of the country's 260 municipalities, or 70%.

Starting next year, the delivery area will be gradually expanded, and by 2027, rocket delivery will be available in about 230 cities and counties. It is estimated to reach more than 50 million people out of Korea's 51.3 million population.

Most of the areas where Coupang's free rocket delivery will be expanded are depopulated areas designated by the Ministry of the Interior and Safety, which has been facing a growing crisis of rural depopulation due to the aging population and low birthrate.

Coupang currently operates 17 delivery zones in Samcheok, Gangwon-do, Kimje, Jeollabuk-do, and Yeongam, Jeollabuk-do. However, in three years, the free rocket delivery program is expected to expand to more than 60 locations in depopulated areas. Representatively, rocket delivery will be introduced to areas with an aging population of more than 40 percent, such as Bonghwa, Gyeongbuk, Goheung and Boseong, Jeollanam-do, Uisung, Yeongyang, and Cheongsong, Gyeongbuk, and Hapcheon, Gyeongnam.

The rural areas are 'grocery deserts' where it is inconvenient to get daily necessities and groceries, and the expansion of Coupang's delivery network and investment is expected to improve the convenience of local residents.

With the expansion of Coupang's rocket delivery network, Wow members in rural areas will be able to shop easily and conveniently, and significantly reduce unnecessary additional delivery fees and travel costs. Coupang's new Kuseg region includes many mountainous and remote areas. For example, since 2020, Wow members on Jeju Island and Udo Island have received unlimited free shipping without additional courier delivery fees of 4,000 to 5,000 won per package. Coupang has invested more than KRW 6.2 trillion over the past decade to build more than 100 logistics infrastructure in 30 locations across the country.

“Coupang's expansion of its delivery footprint is expected to improve the quality of life for consumers,” said Kang Hyung-koo, professor of finance and management at Hanyang University. ”In particular, the free rocket delivery in rural grocery deserts will help develop regional balance by increasing the attractiveness of living in areas hit by aging populations and a declining birthrate.”