Coupang was found to have included a clause in its contract saying it would not be responsible for the outcome or content, even though it receives money from partner vendors under the pretext of running a "reviewer group."
Small and midsize partner companies say they are grumbling that Coupang does not take responsibility for deliverables such as failing to write product reviews, even as they shoulder expenses exceeding tens of millions of won.
According to the small and midsize business community on the 21st, Coupang signs a "Coupang reviewer group program contract" with partners, organizes up to 20 customers as a reviewer group, and provides partner products free of charge. The reviewer group must eat or use the provided products and leave product reviews.
The reviewer group program is run on a one-off contract basis. For each contract, Coupang receives from several million won to more than 10 million won from partners. Some partners repeatedly sign contracts more than 10 times a year and participate in Coupang's reviewer group program.
However, even if the reviewer group does not write product reviews, the expense is neither refunded nor reflected in the next contract. The "Coupang reviewer group program contract" includes a clause stating, "Coupang does not guarantee the writing of product reviews by the reviewer group and bears no responsibility for the content of reviews." Customers who do not write reviews are disadvantaged in reviewer group selection.
A head of a small company on Coupang's marketplace, identified as A, said, "From the payer's standpoint, it is inevitable to feel it is a loss if no product review is written." The person added, "Even if two or three out of 20 people do not write reviews, Coupang does not compensate for this as an expense or bear any post-facto responsibility," and said, "It is a structure in which the partner shoulders the loss."
Coupang's reviewer group program is similar to Amazon's "Vine." Amazon Vine is a paid program in which the partner, as the seller, provides products free of charge and pays a fee to Amazon. Customers selected by Amazon test the products and then write product reviews.
There is a difference in the fee-charging structure. Vine also does not guarantee review writing, but unlike Coupang, it does not charge a fee if no review is posted 90 days after product listing. If Vine charges based on whether a review was actually written, Coupang takes the expense in a lump sum and does not check whether reviews were written.
The reviewer group is one way to offset losses that occur as Coupang runs its lowest-price policy, alongside advertising expenses. Some partners, judging that Coupang's ad effectiveness is weak, run reviewer groups as a second-best option. Some small and midsize partners reportedly make expenditures of hundreds of millions of won a year.
As Coupang posted 41 trillion won in sales last year and is the No. 1 online operator by market share in Korea, many say it is hard to refuse "loss-compensation requests."
An official at a cosmetics company noted, "Coupang's internet advertising effect is modest." The person added, "In the online ad market, the cost per click in even the most competitive areas is only several thousand won, and 10,000 won is considered expensive," and explained, "If you back-calculate Coupang's cost per ad click, it runs 200,000 to 300,000 won per click, so the unit price is high and the effect is weak, which is why we run reviewer groups to at least increase the number of reviews."
Coupang is reportedly the only company in Korea that runs reviewer groups while taking expenses from partners. Platforms such as Musinsa and Market Kurly only send partner products free of charge to selected reviewer groups and do not take separate fees. However, if a reviewer group does not write a review, the customer is managed on a "blacklist."
Coupang said, "Forcing ad expenses or incentives is prohibited by internal policy, and we are proceeding transparently in compliance with relevant laws."