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Streaming service competition

SoftBank-backed Coupang enters Korea’s competitive video streaming arena

Dec 24, 2020 (Gmt+09:00)

Graphics by Jerry Lee
Graphics by Jerry Lee

South Korea’s e-commerce giant Coupang Corp. has thrown down the gauntlet to compete against Netflix Inc. and other local streaming service providers in the country’s growing over-the-top (OTT) market.

The e-commerce operator said on Dec. 24 that it is launching a subscription-based video streaming service, Coupang Play, in a bid to broaden its services from parcel and food delivery, digital payments and online shopping to original video content services.

Coupang Play will initially be available on Android devices for some 5 million Coupang Wow subscribers. Coupang Wow is the online shopping mall’s premium service that offers delivery, free returns and other benefits for a monthly subscription fee of 2,900 won ($2.6).

For a single account held by Wow members, up to five people will have access to Coupang Play’s OTT service. That compares with Netflix's premium service in Korea, which allows four people to access video content under a single account at a monthly fee of 14,500 won. Netflix's cheapest plan in Korea is 9,500 won a month.

Coupang Play will later also be available on Apple’s iOS and other operating platforms.

Graphics by Jerry Lee
Graphics by Jerry Lee

Widely regarded as Korea’s Amazon, Coupang faces tough competition from the likes of Netflix and homegrown players Wavve and Watcha.

Netflix, with its 3.6 million members, has enjoyed success in the Korean market especially on the back of its original series content. In September, the US streaming giant set up a separate production company to finance Korean-language content.

GEARING UP FOR DIFFERENTIATED SERVICE

SoftBank-backed Coupang enters Korea’s competitive video streaming arena


A Coupang official said the company is in negotiations with large US content providers to secure rights to air sporting events such as Major League baseball games in Korea.

For differentiated service, Coupang also plans to unveil popular OTT items such as Your Honor, a US TV series featuring Bryan Cranston as a judge, and on-demand digital news program CNN 10.

In its efforts to gear up for video streaming, Coupang in July acquired Singaporean OTT service Hooq, once one of the top three players in the Southeast Asian market.

Established in 2010 by Chief Executive Bom Kim, Coupang has been aggressively expanding into new businesses, mirroring US e-commerce giant Amazon.com

Coupang is known for Rocket Fresh, a same-day or next-day delivery service for fresh food, utilizing its 170 logistics centers across the nation.

On the back of the growing popularity of its quick delivery services, Coupang’s sales increased to 7.15 trillion won in 2019 from 348.4 billion won in 2014. This year, its sales are forecast to rise further to nearly 10 trillion won as many people were grounded at home amid the COVID-19 pandemic.

STREAMING TO CREATE NEW MARKET FOR COUPANG

Analysts said Coupang Play will create a new market for the e-commerce operator by combining it with its existing services such as delivery and digital payments to commercialize various content on its platform.

Some critics, however, say that the company, struggling under huge operating losses every year, will need to attract extra investment to make its streaming service another success story.

Graphics by Jerry Lee
Graphics by Jerry Lee

In 2015, Coupang raised $1 billion from a new share sale to SoftBank, a year after it raised $300 million from a consortium led by BlackRock. In early 2014, California-based venture capital firm Sequoia Capital invested $100 million in Coupang.

Coupang reported an operating loss of 720.5 billion won in 2019, down from a loss of 1.12 trillion won the previous year. Its accumulated losses since 2014 reached some 3.72 trillion won last year.

Write to Dong-Hui Park at donghuip@hankyung.com

In-Soo Nam edited this article.

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