Coupang announced on March 11 that it has expanded its “Rocket Direct Purchase” service to Japan. The company has been expanding its direct purchase regions, starting from the United States in 2017, followed by China in 2021 and Hong Kong in 2022.
Coupang’s decision to add Japan to its Rocket Direct Purchase regions is due to the growth trend in the Japanese direct purchase market. While there has been an increase in consumers interested in direct Japanese purchases, there has been limited diversity in Japanese direct purchase services available domestically.
According to Statistics Korea, the amount of domestic direct purchases from Japan in the first to third quarters of last year totaled 344.9 billion won (US$262.38 million), showing a 3.2 percent increase compared to the same period of the previous year, which was 334.3 billion won. This is in contrast to the significant decrease in direct purchases from the United States during the same period, dropping from 1.54 to 1.39 trillion won, a 9.7 percent decline. It is estimated that the increase in direct purchases from Japan would have been even greater as the yen depreciation trend continues from the fourth quarter of last year to the beginning of this year.
Coupang’s Rocket Direct Purchase service in Japan includes a variety of products ranging from food and snacks such as Nissin, Meiji, and LeTao, to beauty and household items brands like Senka and Biore. Additionally, it will offer kitchenware and stationery products.
Coupang has decided to expand its direct purchase service to other countries due to the aggressive expansion of Chinese e-commerce companies. Giants like AliExpress and Temu are aggressively pursuing domestic e-commerce leaders like Coupang by investing heavily in promotional costs. Coupang appears to be countering this by establishing a lineup of reasonably priced and high-quality Japanese direct purchase products, countering the weaknesses of Chinese e-commerce such as counterfeit and low-quality products.
An industry insider stated, “Coupang has recently achieved a turnaround to profitability. However, considering its previous cumulative losses, it needs to continue growing to have opportunities for future recovery. In fact, the domestic market is already saturated, and with the entry of Chinese e-commerce giants like AliExpress and Temu, the competition has become even fiercer.”