Coupang to raise membership fees, 1st hike in over 2 years

Coupang Inc., South Korea’s largest e-commerce platform, said on Friday it will raise membership fees 58.1% to 7,890 won ($5.7) per month as it plans to spend more than 3 trillion won ($2.2 billion) to offer Rocket Delivery across the country to fight off Chinese rivals such as AliExpress and Temu.

The fee hikes, slated to begin in August, mark the first increase in its membership fees in over two years. In December 2021, it bumped up the fees by 72.1% to 4,990 won.

Based on its 14 million paid users as of the end of 2023, Coupang is expected to collect 1.3 trillion won in membership fees annually, compared to the current 838.8 billion won.

The paid membership services encompass Rocket Delivery, or same- or next-day delivery, reduced delivery fees and free returns.

Their subscribers are also allowed to watch Coupang’s over-the-top streaming services on Coupang Play and use free food delivery service on the Coupang Eats app at no additional cost.

The fee increase comes after the company recently announced a plan to spend an additional 3 trillion won to expand Rocket Delivery services nationwide by 2027 to widen the gap with AliExpress and Temu.

Since its founding in 2010, Coupang has spent more than 6 trillion won to build up its logistics infrastructure.

The two Chinese e-commerce platforms now rank second and third in the Korean online shopping market, respectively, by monthly active users.

Coupang said that despite the drastic fee hikes, its membership fees are still much lower than other OTT platforms.  

Netflix and Korea-based TVing charge 17,000 won for a monthly subscription, respectively. YouTube premium services are offered at 14,900 won per month, while Disney+ subscription fees are 13,900 won.

Coupang added that the benefits offered to its paid members translate into 4 trillion won in costs per year.

Last month, AliExpress announced that it would invest $1.1 billion in building fulfillment centers in Korea over the next three years to challenge Coupang.

In 2023, Coupang logged its first-ever profit of 617.4 billion won in its 14-year history on sales of 31 trillion won. But its operating profit remained at a mere 1.9% in 2023.

Write to Jae-Kwang Ahn at ahnjk@hankyung.com

Yeonhee Kim edited this article.