South Korea’s Largest Online Retailer in Trouble Amid Fire, Worker Deaths, Boycott

Firefighter fatality adds to company’s death toll . . .

South Korea’s largest online retailer Coupang is facing boycott calls following the death of a firefighter in a blaze that burned down one of the company’s largest distribution centres in the suburb of Icheon. The fire burned uncontrollably over two days – flammable materials in the warehouse and a faulty sprinkler system allegedly contributed to the destruction. The death and fire follow months of criticism levied by Coupang employees and labour advocates, who claim inhumane working conditions and inattention to safety issues have led to the deaths of nine employees. Coupang has taken full responsibility for the firefighter’s death, pledged to continue paying salaries to its Incheon warehouse workers, and argued that its numbers for work-related deaths and accidents are considerably lower than the industry average.

Industry discontent, societal concerns . . .

The boycott calls signal increasing public dissatisfaction with the digital commerce and delivery industry, which has exploded in South Korea since the pandemic began. Intense competition between Coupang and others offering similar services – ranging from established startups such as food delivery platform Baemin to stalwart conglomerates such as internet titan Naver – has led companies to implement demanding standards for employees, vendors, and partner restaurants. Public protests and union strikes have ramped up over the past year, with the most recent involving roughly 10 per cent of the country’s delivery workers. Polling suggests that South Korean consumers, particularly young ones, are increasingly concerned about corporate social responsibility and ethical management when determining which goods and services to use.

After successful IPO and expansion abroad, what next?

Coupang’s increasingly tarnished domestic image contrasts with its landmark public listing on the New York Stock Exchange on March 11, the largest from a foreign company since Alibaba in 2014 and a first for a South Korean company. The company’s globalized outlook is representative of the broader Korean e-commerce and delivery industry, as rivals Baemin and Naver have built major bases in Southeast Asia over the past two years. Some have criticized Coupang for refocusing efforts overseas and neglecting responsibility domestically. The ongoing controversy over e-commerce and delivery working conditions throughout Asia, among both locally- and foreign-owned firms, suggests that this kind of scrutiny will be difficult for Coupang and other companies to evade regardless of location.