Debate continues over the effectiveness of Coupang's recently announced compensation plan for customers affected by a personal data leak. Coupang touted it as an "unprecedented compensation plan," saying it would provide coupons worth 50,000 won per affected customer, but critics say it is essentially just a marketing tool that pushes users toward non-popular services. Among consumers, criticisms such as "a compensation plan in name only" and "a ploy to boost sales" are pouring in.
According to related industries on the 31st, Coupang's plan consists of four purchase vouchers totaling 50,000 won: all products on Coupang Rocket Delivery, Rocket Direct Purchase, and Marketplace (5,000 won), Coupang Eats (5,000 won), Coupang Travel products (20,000 won), and R.LUX products (20,000 won). Instead of cash-like compensation or an option to choose, it is provided as discount coupons that can be used only when using specific services within Coupang.
Converted into an amount, the plan totals 1.7 trillion won. While it is the largest consumer damage compensation ever announced by a domestic company, public sentiment is turning more negative. Coupang Travel and R.LUX, which account for 80% of the total compensation, have low usage frequency and focus on high-priced products, making additional payment inevitable to use the coupons.
Negative reactions among consumers are continuing. On various social networking services (SNS) and online communities, posts read: "I didn't even know R.LUX and Travel existed—is this bundling?" "A ploy to increase user numbers," "I didn't expect much, but there's no sincerity at all," and "It's a 50,000 won compensation plan in name only, actually worth 10,000 won."
In fact, R.LUX is a luxury platform that Coupang launched in Oct. last year and it is not yet widely recognized. As it mainly sells luxury beauty and fashion brands, product prices tend to be high. As of 12 p.m. that day, the average price of 12 popular beauty products of the month was about 70,000 won. For fashion, luxury bags and padded jackets priced in the several million won range were listed among the week's popular items.
Some products are even more expensive than on other platforms. MAC Glow Play Tender Talk Lip Balm (30,680 won) is being sold for 26,000 to 28,000 won on Hyundai H Mall, Lotte ON, and Gmarket. The Gucci GG Marmont medium shoulder bag (3,761,000 won) is being sold in the 3.2 million to 3.4 million won range on Gmarket, 11Street, Trenbe, and LF Corp. Mall.
Coupang Travel is a travel product section launched in 2010. It has sought to expand market share by introducing premium services, but tangible results have been lacking. Coupon utility is similarly low. For major products such as domestic and international lodging, packages, and flights, unit prices are mostly in the hundreds of thousands of won, and within the limit the items one can buy are largely museum and theme park tickets or franchise mobile gift cards.
Moreover, the fact that this compensation plan is also set to apply to customers who left Coupang after the personal data leak has been cited as a problem. Customers who withdrew must rejoin Coupang to use the coupons, prompting criticism that it is closer to an event to draw customers back and encourage continued use than to damage compensation.
The Korea National Council of Consumer Organizations issued a statement on the 29th, when Coupang released the plan, saying it "was designed around benefits that promote consumption, and is not compensation for invasion of personal information, but has degenerated into a marketing tool to induce additional purchases and re-signups." On the same day, People's Solidarity for Participatory Democracy (PSPD) said, "This is deception of the public, not compensation," adding, "This is not a discount but a marketing expenditure, and even this ultimately signals an intent to avoid losses by boosting sales."
At a National Assembly hearing held the previous day, criticism of the plan continued, while Coupang said it is not considering additional compensation. Kim Hyun-jung of the Democratic Party of Korea said, "This is not compensation but a ploy," and asked whether there was willingness to offer a better plan. Coupang Chief Executive Harold Rogers dismissed the possibility, saying, "The scale of this plan is unprecedented."