Investors are watching closely as South Korean e-commerce giant Coupang prepares to release its financial results on Thursday. The company is currently dealing with the messy aftermath of a massive data breach that has sent customers running to rivals and caused its stock price to tank.
In November, Coupang admitted to a leak affecting about 34 million users. Hackers accessed names, phone numbers, and addresses. While payment details remained safe, a government investigation blamed the incident on management failures rather than a highly sophisticated cyberattack. Coupang promised to fix its security and prevent future harm, but the damage to its reputation appears significant.
Shoppers are already voting with their wallets. Data shows that Coupang’s monthly active users on mobile dropped by 3.5% in January compared to November. Meanwhile, its biggest rival, Naver, saw a massive 23% jump in users during the same period. Daily consumer spending on Coupang also fell by over 6% as people took their business elsewhere.
Wall Street has punished the company for these stumbles. Coupang’s shares listed in New York have plummeted around 34% since the breach was disclosed. Analysts have cut their revenue estimates, fearing that the company’s iron grip on the South Korean market is slipping just as traditional retailers rally.
To make matters worse, the government is planning to change rules that helped Coupang grow so fast. For over a decade, big physical stores faced restrictions on operating overnight, giving Coupang’s “Rocket Delivery” service a huge advantage. Now, officials plan to ease those restrictions, allowing traditional hypermarkets to compete directly in the overnight delivery space.
Competitors like Naver and E-Mart are wasting no time jumping on this opportunity. Naver’s CEO recently reported a meaningful rise in both users and spending. Logistics firm CJ Logistics, which works with Naver, said its overnight delivery volume jumped 120% in the fourth quarter.
Despite the chaos, some experts believe Coupang still has a fighting chance due to habit. Analyst Seo Jung-yeon noted that “there is still nothing quite as convenient as Coupang.” However, with consumer trust shaken and new laws looming, the company faces its toughest test yet.
