Coupang flopped on data leak, so why can’t users just leave?

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Coupang flopped on data leak, so why can’t users just leave?

Coupang delivery boxes are seen outside a building in Jung District, central Seoul on Dec. 2. [NEWS1]

Coupang delivery boxes are seen outside a building in Jung District, central Seoul on Dec. 2. [NEWS1]

 
Coupang’s recent data leak is unprecedented in both scale and scope within Korea’s retail sector, leaking the personal information of 33.7 million users. With dozens of alternative e-commerce platforms available, it may seem easy for users to simply switch. But for consumers, the shift isn’t so straightforward since the New York-listed firm has built Amazon-like lock-in mechanisms that make it difficult to leave.
 
Competing players like Naver’s shopping service, Gmarket and SSG.com offer far fewer products eligible for early morning delivery, whereas Coupang’s coverage is far more expansive, ranging from cosmetics, food and everyday school items to electronic devices, including smartphones. The membership offerings — which provide access to Coupang Play’s streaming content and free food delivery via Coupang Eats — serve as yet another reason users find it hard to walk away from the platform.
 

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“The data breach is disappointing, and Coupang’s handling of the case just looks like they are burying their head in the sand, but I’ve been using Coupang even after the breach,” Lim Hyun-jun, a Seoul resident and a longtime user of Coupang, told the Korea JoongAng Daily. Lim, who recently got engaged, said he would continue to use Coupang to buy the products he needs for his new house.
 
Lim said he's been subscribed to the WOW monthly membership since the very beginning and regularly purchases daily necessities and personal items from Coupang “at least twice a week.”
 
“I also use Coupang Eats’ food delivery service and watch the English Premier League with Coupang’s Sports Pass,” he said.
 
Another Coupang user, Choi Yeon-soo, said it was hard to leave the service because she often has to make quick purchases for her company.
 
“Rocket WOW delivery is the reason I can’t leave Coupang; I purchase not only my own daily necessities but the items I have to buy for my job, almost always from Coupang,” Choi said.
 
Coupang's headquarters in Songpa District, southern Seoul. [NEWS1]

Coupang's headquarters in Songpa District, southern Seoul. [NEWS1]

 
Coupang’s weekly active user count (WAU) and its daily user count (DAU) share a similar story. Coupang’s WAU, which stood at 29.42 million on the week starting Nov. 24, increased to 29.94 million on the following week, on the week starting Dec. 1, according to market tracker WiseApp Retail. The DAU, provided by IGAWorks Mobile Index, also showed that Coupang’s daily active user count fluctuated from 15.6 million on Nov. 22 to 17.99 million on Dec. 1 and back down to 16.1 million on Sunday.
 
Coupang first announced a data breach rather quietly on Nov. 20, but it originally claimed that only 4,536 accounts were affected. The news only became widespread when the company released a follow-up statement that a whopping 33.7 million accounts were leaked on Nov. 29 and sent text messages to affected users on Nov. 29 and 30. 
 
Ex-Coupang CEO Park Dae-jun, second from left, attends a parliamentary inquiry by the National Assembly’s Science, ICT, Broadcasting and Communications Committee at the National Assembly building in Yeouido, western Seoul, on Dec. 3. Park stepped down from the position on Dec. 10.

Ex-Coupang CEO Park Dae-jun, second from left, attends a parliamentary inquiry by the National Assembly’s Science, ICT, Broadcasting and Communications Committee at the National Assembly building in Yeouido, western Seoul, on Dec. 3. Park stepped down from the position on Dec. 10.

 
At the same time, the active user numbers for some competing platforms did rise, but not by a significant margin. The WAU of 11Street rose from 3.7 million to 4 million in the same period, while Naver Plus Store trickled up from 3.45 million to 3.54 million. Notably, AliExpress's weekly active users dropped from 6 million to 5.4 million.
 
The daily and weekly active user figures cannot be used as deciding evidence that concludes the fate of Coupang — whether the users are staying or leaving the platform — because the short-term active user counts naturally fluctuate day by day. The increase in the user count not only logs users using Coupang to browse and purchase products, but also those who logged in to delete their credit card details, to check whether there were any suspicious activities and users deleting their Coupang account altogether.
 
But longtime users and subscribers of the paid membership testify that it is the platform’s Amazon-like ecosystem that makes it hard to leave, especially when there is no direct competitor that offers as much as Coupang does.  
 
“The daily discount items on Coupang are what make me stay; the discounted items are often one-third cheaper than buying them from Naver, not to mention the additional delivery cost that would occur if I had bought from them,” said user Lee Young-suk, referring to the timed discounts Coupang offers every day. 
 
A screenshot of Coupang's website showing the weekly discount section [SCREEN CAPTURE]

A screenshot of Coupang's website showing the weekly discount section [SCREEN CAPTURE]

 
Coupang offers free Rocket delivery for products over 19,800 won ($13), but that minimum price is removed with a WOW subscription. While Naver Shopping and Kurly also offer next-day delivery in some cases, they often have a higher bar for delivery fee exemption, making it less competitive for users who do not purchase items in bulk.
 
Coupang Play’s Sports Pass is also something that can’t be replicated in other platforms, as it owns exclusive broadcasting rights to the Premier League, La Liga, Bundesliga, Ligue 1, the NBA and Formula One — making it the only official way to watch the sports in real time with Korean commentary.
 
Users who have purchased Coupang Care — a Coupang version of electronics insurance similar to AppleCare — are also stuck with Coupang until their insurance expires, as the insurance is linked to the Coupang account.
 
And even though the data breach and personal information leak are severe and worrisome to many, the rise in hacking incidents over the years has led many Koreans to simply give up.
 
“Data breaches are indeed quite dangerous and serious, but maybe I’ve become desensitized to them as a consumer,” Lim said. “The firms need to be liable for such incidents, and the government needs to make regulations so that similar cases don't keep happening all the time.”
 
Ex-Coupang CEO Park Dae-jun listens during an emergency interpellation session on the company's recent data breach, held by the National Assembly’s Science, ICT, Broadcasting and Communications Committee in Yeouido, western Seoul, on Dec. 2. [NEWS1]

Ex-Coupang CEO Park Dae-jun listens during an emergency interpellation session on the company's recent data breach, held by the National Assembly’s Science, ICT, Broadcasting and Communications Committee in Yeouido, western Seoul, on Dec. 2. [NEWS1]

 
Some brave users have bitten the bullet and decided to leave Coupang altogether.
 
“I just felt that I didn’t want to use Coupang anymore after the hacking incident and the inappropriate response from the platform,” Lee Seong-jun, who pulled the trigger to cancel his membership and delete his account last week, said.
 
“The inconvenience of using another platform just wasn’t my priority. I just didn’t want to use Coupang anymore after everything.”

BY CHO YONG-JUN [[email protected]]
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