Home > Opinion > Columns

A ‘Coupang kingdom’ built by the National Assembly

Published: 26 Jan. 2026, 00:03

Kim Dong-ho

The author is an editorial writer at the JoongAng Ilbo.

Even after the personal data of 33.7 million customers was leaked, the company’s foreign chief executive appeared before the National Assembly, slammed the desk and shouted, “Enough.” Behind that display lay Coupang’s overwhelming market dominance. Just as smartphones have become as essential as food, clothing and shelter for modern life, Coupang has become a service Koreans can scarcely do without. How long this landscape will last is uncertain, but for now it is an undeniable reality.

A two-day parliamentary hearing was held starting Dec. 30, 2025, to examine a Coupang security breach and personal data leak, allegations of unfair trade practices and working conditions and to seek measures to prevent a recurrence. The photo shows delivery vehicles parked at a Coupang logistics center in Seoul on that day. [NEWS1]

Who created this situation? The starting point was a series of political choices that leaned on populist regulation. In 2012, the National Assembly revised the Distribution Industry Development Act in the name of protecting traditional markets, ushering in full-scale restrictions on large discount stores operated by domestic conglomerates. Hypermarkets were required to close every other Sunday and were barred from operating between midnight and 10 a.m. Yet neither traditional markets nor neighborhood shopping districts recovered as hoped. Consumer demand had already shifted toward large retailers, and the subsequent emergence of delivery platforms only accelerated that trend.

Harold Rogers, interim CEO of Coupang, answers questions from lawmakers during a hearing on the e-commerce giant's massive data leak and other practices at the National Assembly building in western Seoul on Dec. 31, 2025. [YONHAP]

Consumers were inconvenienced by the restrictions on hypermarkets, but demand did not flow back to traditional markets. Parking access and product selection at local markets could not replace the advantages of big-box stores. Even so, regulators insisted that the rules could not be eased before their effects were proven. As parliamentary seats changed hands with each election, that rationale remained intact. The regulations became untouchable.

During that time, Coupang rose. Like Amazon, the company built a nationwide logistics network, and it took only four to five years for Coupang to effectively dominate Korea’s retail market. While domestic players such as Emart, Lotte Mart and Homeplus were hamstrung by regulation, Coupang expanded its influence through a distribution system that operated around the clock. Early on, it endured massive losses, but market dominance was only a matter of time.

Then the Covid-19 pandemic delivered a decisive opportunity. As contact-free consumption became routine, doorstep delivery turned into a way of life. After securing its grip on the market, Coupang sharply raised the monthly fee for its Wow membership from 4,990 won ($3.45) to 7,890 won. Consumers had little room to resist. That was possible because the National Assembly had effectively created a retail landscape tailored to Coupang alone. Domestic competitors, tied to offline store-centered structures, struggled to pivot quickly. Even before Coupang’s rise, they had already been losing competitiveness amid the broader digital transformation.

As Coupang was expanding its reach, domestic private equity firm MBK Partners acquired Homeplus in 2015. After the post–Asian financial crisis boom faded and foreign private equity firms slowed their activity, MBK moved aggressively to buy large assets and grew into Korea’s largest private equity firm. Yet rather than focusing on the traditional private equity role of improving competitiveness and reselling, MBK prioritized high returns, relying on excessive leverage to acquire Homeplus.

Homeplus’s competitiveness then deteriorated steadily. Even as the possibility of a credit rating downgrade loomed, the company issued bonds worth hundreds of billions of won and soon after sought court receivership. In the end, the heavy debt structure stood in the way of any recovery. Allegations emerged that management failure risks had been shifted onto bond investors, leaving MBK under investigation.

Rapid structural change in the retail industry also contributed to this outcome. The decisive variable was Coupang’s ascent. While Coupang accepted orders 24 hours a day and delivered even at dawn, Homeplus had to endure operating hour restrictions and mandatory closures. Even MBK, which had grown into the country’s leading private equity firm, found it difficult to escape the structural constraints imposed by the Distribution Industry Development Act.

Shoppers enter a Homeplus branch in Michuhol District, Incheon, on May 27, 2025. [NEWS1]

The ripple effects of regulation do not end there. Independent neighborhood grocers and convenience store owners alike complain of declining customers. It is the result of consumption patterns in which even a 1,000-won pack of toothpicks is ordered online. Coupang, which generates enormous profits in the Korean market, has even sought to frame a personal data breach as a trade issue. How much lobbying it has conducted in Washington is unknown, but some U.S. lawmakers have stepped in to defend the company, urging the Korean government to “stop the witch hunt.” Coupang’s U.S. shareholders have also sent letters signaling their intent to pursue investor-state dispute settlement, asserting that the Korean government is trying to undermine the ability of a successful American company to compete with Chinese firms.

At the root of these conflicts lies a distorted market structure created by the Distribution Industry Development Act. The National Assembly must now confront reality. It should reconsider regulations that no longer fit the times and reform the system in a way that restores fair competition. Only then can neighborhood businesses find room to breathe and a market tilted excessively toward the U.S. company Coupang be brought back into balance.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.