Ms. A (39), a homemaker who recently engaged in ‘Talpang’ (leaving Coupang), chose Homeplus as an alternative. After an unprecedented large-scale personal data leak, she had been dissatisfied with Coupang's consistently defensive response, and then she heard that Homeplus, due to a cash crunch, was delaying payroll for its employees. Ms. A said, “I buy at Homeplus stores whenever I can. It is a bit inconvenient, but I do it to show support,” and added, “Information was leaked even at Coupang, the number-one player, so why would other e-commerce operators be safe? I am satisfied that simply cutting back on online shopping has reduced my living expenses.”

Her case starkly shows both the shifting landscape of the domestic retail industry, where reliance on online shopping channels has intensified, and the resulting consumer dilemmas. However, following the large-scale non-settlement incident at TiMeP (TMON+Wemakeprice) and now the Coupang incident, distrust is growing across e-commerce. Observers inside and outside the industry note that the Coupang crisis could be both an opportunity and a risk. Given the sector’s low entry barriers and fierce competition for market share, fortunes will likely diverge depending on who secures customer trust.

According to National Data Office statistics released on the 27th, total online shopping transaction value last year is expected to hit an all-time high. Cumulative online shopping transactions surpassed 247 trillion won by November, already far exceeding the 2024 record of 242 trillion and 897 billion won. Even on a monthly basis, November last year topped 24 trillion won for the first time. This is evidence that, despite weak domestic demand and subdued consumption, online shopping continues to grow steadily.

There are many players in the market. Beyond the “big two” of Coupang and Naver, the field ranges from open-market general malls such as Shinsegae Group’s SSG.com, Gmarket, 11Street, and Lotte ON to specialty and niche malls like Kurly, Musinsa, KREAM, and Today House. On top of that, C-commerce (China-based e-commerce) players including AliExpress, Temu, and Shein are on the offensive.

As online consumption has become commonplace, the annual growth rate of online shopping transaction value is slowing. The year-over-year growth rates of 21% and 10.4% in 2021 and 2022 fell to 8.3% in 2023 and 5.8% in 2024. A once rapidly expanding domestic e-commerce market has moved past its growth phase into maturity.

In a market that has entered saturation, intensifying competition means deteriorating profitability. In a report released two months ago, the Samjeong KPMG Economic Research Institute assessed, “Power struggles among major e-commerce companies to gain an edge will shift from quantitative growth to strategies centered on qualitative growth,” adding, “Across the market, concerns are growing over securing competitiveness and achieving sustainable growth.”

The e-commerce sector expects the Coupang incident to trigger full-fledged ‘separating the good from the bad’. An industry insider said, “Each company is moving to secure customers by strengthening paid memberships and the like, so from now on it is a battle of trust rather than speed,” adding, “As customer expectations have risen, we plan to keep emphasizing the message ‘you can trust us’ across not only price, quality, and convenience, but also information security.”

Most expect Coupang to retain its dominant market position despite the incident, but its growth pace will likely slacken. Naver, long seen as Coupang’s chief rival, is cited as the biggest beneficiary of any spillover gains. Data platform company IGAWorks reported on the 30th of last month that weekly users of Naver Plus Store rose 15.2%, from 3.25 million in the fourth week of November last year to 3.75 million in the third week of December. The report stated, “The current e-commerce competition is not about ‘who will beat Coupang,’ but about ‘who will absorb consumers different from Coupang’s, faster and more accurately.’”

As public calls to regulate Coupang spread, the e-commerce industry is closely watching to see whether the fallout will reach it. The Fair Trade Commission is looking into allegations that Coupang effectively poached popular products from partner sellers by launching its own private brand (PB) versions, while bills to shorten settlement cycles for sellers have been introduced in the National Assembly. To strengthen accountability for personal data leaks, a plan to introduce punitive surcharges of up to 10% of sales is also underway.

Another industry source said, “If until now companies have focused on growth or survival, going forward they will have no choice but to pay particular attention to compliance (observance of laws).”

More consumers are developing habits to reduce reliance on e-commerce. On internet communities, there are posts of ‘self-reflection’ that one-click and easy payments simplified the purchasing process, leading to more impulsive spending than planned or price-compared shopping. As hacking and data leaks have hit other major domestic companies such as Kyowon Group, many are also deleting saved payment methods or address books from apps they do not use often.

Experts stress that the way to earn consumer trust is ESG (environment·society· governance) management. A professor who requested anonymity said, “In a company’s growth process, social oversight and corporate ethics must work together, but e-commerce has been packaged as an innovator and has never really faced proper regulation,” adding, “The Coupang incident is a prime side effect of that.”

Seo Yong-gu, a professor in the Department of Business Administration at Sookmyung Women's University, said, “This incident revealed to the entire nation the ‘uncomfortable truth’ behind how we were able to receive goods so easily and conveniently,” adding, “Other e-commerce players must practice ethical management and win-win strategies to minimize the ‘Hoepang’ (Talpang customers returning to Coupang) phenomenon.”