Key Points:
- Investors eagerly await Coupang’s earnings after a massive data breach.
- The South Korean government blamed poor management for the leak.
- Mobile app usage and daily customer spending dropped significantly.
- New regulations will let traditional stores compete in overnight deliveries.
Coupang faces a tough test this Thursday as investors prepare to review the company’s latest financial results. A massive data breach and shifting government rules currently threaten the e-commerce giant’s dominance in South Korea.
In November, Coupang suffered a severe data leak that exposed the personal details of roughly 34 million shoppers. The compromised information included names, shipping addresses, and phone numbers, though payment details and passwords remained safe. Recently, the Science Ministry placed the blame squarely on poor management practices rather than a complex cyberattack. Coupang promised to fix the issues and prevent future problems.
This security failure severely damaged consumer trust across the country. Since the company disclosed the breach, its stock price has plunged about 34 percent on the New York Stock Exchange. Shoppers are voting with their wallets, causing average daily spending on the app to fall by more than 6 percent in January.
Frustrated customers are actively seeking alternatives. Coupang lost 3.5 percent of its mobile users between November and January. At the exact same time, competitor Naver saw its user base jump by a massive 23 percent. Financial analysts noticed the trend and quickly cut their revenue estimates for Coupang’s fourth quarter.
Adding to these troubles, the South Korean government plans to change long-standing retail laws. For over a decade, regulations prevented traditional brick-and-mortar stores from operating overnight to protect small neighborhood shops. This rule gave Coupang a massive advantage with its signature Rocket Delivery service, which drops packages at doors before dawn.
Now, officials want to ease these late-night restrictions for large supermarkets. Companies like E-Mart and Kurly are already rushing to expand their fast-delivery options to challenge Coupang.
Despite these heavy blows, some financial experts believe Coupang will weather the storm. The platform offers deeply integrated services and highly competitive prices that keep many users hooked. The real question is whether rival companies can move fast enough to steal permanent market share while Coupang recovers.
