November 21, 2024

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(Getty Images)

South Korean e-commerce firm Coupang on Wednesday pledged to invest 3 trillion won ($2.23 billion) over the next three years to expand its signature Rocket Delivery service nationwide by 2027.

The company's logistics network is expected to be drastically expanded, with eight new fulfillment centers being built by 2026. The centers also will feature more advanced automation technology to improve operational efficiency overall.

Following the expansion, Coupang said that its overnight Rocket Delivery service will be elevated from the current level of coverage at 70 percent to over 88 percent across the nation. This will grant service accessibility to more than 50 million individuals, nearly equivalent to the nation’s total population, the company added.

"There have been variations in delivery times based on regions, so our goal is to gradually narrow this gap, striving for nationwide free delivery to all by 2027," a Coupang official said.

The locations of eight fulfillment centers that will be newly established are -- Gimcheon, North Gyeongsang Province; Jecheon, North Chungcheong Province; Busan; Icheon, Gyeonggi Province; Cheonan, South Chungcheong Province; Daejeon; Gwangju and Ulsan.

Fulfillment centers in Gwangju and Daejeon are slated to commence operations this year, with construction planned for Busan and Icheon in the second quarter, Gimcheon in the third quarter and Jecheon in the fourth quarter.

Coupang plans to hire hundreds to thousands of personnel per facility, anticipating that it will draw back the younger generation who had previously migrated to Seoul and metropolitan areas for employment opportunities.

Among the 60,000 Coupang employees calculated in the first half of last year, those aged between 19 and 34 accounted for over one-third of the total workforce, according to the firm.

In the past decade, Coupang has invested 6.2 trillion won in constructing a logistics network comprising over 100 facilities across 30 regions in the country. The firm has expanded the service coverage to 182 out of 260 cities, counties and districts nationwide.

With the envisioned expansion, its Rocket Delivery service is anticipated to be feasible in approximately 230 locations by 2027.

The majority of these expansion areas are expected to encompass regions experiencing population decline, as designated by the Ministry of the Interior and Safety. These locations encompass islands and remote mountainous areas experiencing population decline below 30,000, such as Gurye and Gokseong in South Jeolla Province, and Jinan in North Jeolla Province, among others.

Coupang foresees that its delivery expansion will contribute to tackling social issues as well, particularly in areas where the elderly population, aged 65 and above, comprises 40 percent or more of the demographic. The areas include Bonghwa, North Gyeongsang Province, and Goheung and Boseong in South Jeolla Province, among others.

With the expanded delivery coverage, Coupang anticipates an uptick in its Wow membership subscriptions, which currently stand at 14 million, reflecting a 27 percent year-on-year increase.

Meanwhile, the firm's big spending plan comes after its Chinese rival Alibaba Group recently committed to invest $1.1 billion in Korea by 2027.

By Kim Hae-yeon (hykim@heraldcorp.com)
The Korea Herald