In the fiercely competitive food market dominated by large corporations, more local small and midsize food manufacturers are rapidly growing by building logistics competitiveness through Coupang.
Even amid an economic downturn and weak domestic demand, "hidden champions" are emerging as representative small and midsize enterprises of their regions by enhancing differentiated brand competitiveness on the back of fast farm-to-door and dawn delivery systems that reduce various distribution costs, as well as local "Couse-areas."
Coupang said on the 9th that outstanding local small food manufacturers in the kimchi, doenjang stew, and refrigerated ham segments have continued rapid growth for several years despite intense competition.
In these food categories, a few large corporations have long held more than 70% of market share. In addition, the growth rate of domestic food and beverage retail sales last year was 2.2% from a year earlier, and 2.3% in the second quarter of this year from a year earlier, reflecting sluggish growth over the past several years. However, among the small food companies that teamed up with Coupang, there are cases of achieving severalfold growth in a short period.
Mosan FS, a kimchi manufacturer in Gimhae, South Gyeongsang Province, is a prime example. The company said it generated 6 billion won on Coupang last year, about half of its total sales of 11.5 billion won. That is a 38-fold increase in five years compared with its first-year sales upon joining in 2019 (160 million won). This year, it expects total sales of 15 billion won.
Before joining Coupang, Mosan FS hovered for about 10 years at around 3 billion won in annual sales, the threshold for small merchants. Starting as a side-dish shop in the early 2010s and supplying to local elementary, middle, and high schools, it shifted to a business-to-consumer (B2C) company after joining Coupang, stepping up as a small and midsize enterprise and surpassing 10 billion won in annual sales for the first time.
In the doenjang category, traditional soybean paste produced at an elevation of 600 meters in Jirisan is popular. "Jirisan Piagol" doenjang uses "gorosoe sap," a Jirisan specialty, instead of water and insists on using only Shinan sea salt that has been desalinated for more than three years. The company's sales jumped eightfold from 50 million won in 2021, its first year on Coupang, to 400 million won last year, and its goal this year is 500 million won.
Jirisan Piagol makes its products on the mountainside of Jirisan, a 30-minute drive from downtown Namwon, North Jeolla Province, but because Coupang's logistics centers are located throughout the Honam region, Jirisan doenjang is delivered nationwide with fast dawn delivery.
Small and midsize companies cite Coupang's advantages as reduced distribution costs through direct transactions without the complex distribution structure and fees of wholesalers and middlemen, fast delivery that maintains product quality, and a business structure that lets companies focus only on product development and production. As a result, over the past five years (2020–2024), more than 10,000 companies have graduated from small-merchant status on Coupang.
A Coupang official said, "We will actively discover excellent products from local small merchants, expand their sales channels, and spare no effort to help them achieve meaningful growth amid competition with large corporations," adding, "We will strive to help more small merchants grow into small and midsize enterprises."