[김기찬의 인프라] Questions and tasks posed by Coupang, who made his world debut

Kim Ki-chan, reporter specialized in employment and labor

Coupang was established in August 2010. The source was 3 billion won, which was raised by Coupang’s chairman of the board of directors, Kim Bum-suk, while doing business in the United States. It was listed on the New York Stock Exchange in the United States after 10 years and 6 months. It has made its name known around the world as a global distribution company. Big hands like JPMorgan threw themselves into Coupang’s competition without hesitation.

It’s amazing. On the one hand, the questions and challenges posed by Coupang’s global capital markets were also immediately resolved.

The Korean parcel industry is growing. According to the Ministry of Lands, Infrastructure and Transport, the volume of goods last year was 3,373 million boxes. It has increased by 20.9% since 2019. Compared to 2012 (1,450 million boxes), it increased 2.4 times. Last year’s sales amounted to 7,492.5 billion won, 112.7% more than in 2012 (3.5232 billion won). It’s a rocket scissor-class growth.

The Coupang logo and the Korean flag were listed on the New York Stock Exchange on the 11th, in line with Coupang’s listing. [사진 쿠팡]

Coupang’s listing on the New York Stock Exchange read: “The scale of Korea’s distribution, food, food delivery and travel markets is $ 470 billion (about 520 trillion won).” . That means it can still grow 70 times more.

Coupang’s trust is due to the DNA of innovation. Direct delivery and rocket delivery, which no one had ever tried, shook the market. It was then that there were no companies that even offered online shopping malls. Coupang was printed as a synonym for courier or delivery. Son Jeong-eui, president of Softbank of Japan, was fascinated by this and was willing to invest more than 3 trillion won. Coupang’s trip to the New York Stock Exchange was also shocking. This is where there is a market leader called Amazon. Still, there is only one reason the package is cheap. I thought it was a place to receive the DNA of innovation. Differential voting rights, which can cast 29 votes per share, are a solid foundation for creative destruction. There is no need for a participation dispute over management rights. It is the difference between the global capital market and the Korean system.

National delivery unit price trend. Graphic = Reporter Kim Kyung-jin [email protected]

As a startup, Coupang was strong despite running a deficit of trillion won a year. However, most startups cannot. It is because there are strict regulations that do not know when and where it will explode. There is also a report that it is difficult for three of the world’s top 10 startups to do business in Korea. WeCash, Airbnb, Grab and Block One based on big data.

In particular, innovation in the workplace is remarkable. The delivery engineer for the existing courier company is self-employed. The courier company signs a contract with them and pays a fee according to the number of deliveries. It works as two companies. However, Coupang’s delivery driver is a full-time employee. You get a salary instead of a commission. Since they are not self-employed, they are subject to labor laws, including the Labor Standards Act rather than the Fair Trade Act. It is difficult for existing companies to even imitate the Coupang labor system. It costs a lot. This method of work, which has increased decent service jobs while incurring huge losses, deserves innovation in employment.

National parcel delivery volume. Graphic = Reporter Kim Kyung-jin [email protected]

However, the biggest challenge that Coupang has to solve is also the labor problem. In particular, workplace accidents are serious. It was in the same position as the Amazon, which President Kim took as a rival. Amazon has more than 150 package delivery centers in the United States. The injury rate among employees who work here increased by 33% between 2016 and 2019. Interestingly, the US state of Washington is trying to classify itself as a high-risk industry by separating only Amazon warehouses from among many warehouses. When it becomes a high-risk business, the business owner’s industrial accident insurance premium increases by 15% and $ 2.17 per hour. In Washington state alone, there are 11,199 warehouse employees. The division’s industrial accident insurance premium burden is estimated to increase by $ 24,000 per hour.

According to data presented to the National Assembly by the Ministry of Employment and Labor, the number of approvals for workplace accidents in Coupang increased 3.3 times from 223 in 2016 to 758 last year. Considering the fact that the number of industrial accident approvals by other companies is in the single digits, it is huge. Of course, there is a structural problem that is difficult to recognize as an industrial accident because the delivery engineer of other logistics companies is self-employed. It may be unfair to Coupang. Still, there are too many workers who get hurt while working.

Coupang denies industrial accidents caused by overwork, saying: “We regulate the working day to 50 hours a week.” However, this uniform concept of working hours can increase workplace accidents. In fact, the average work hours of employees who were judged overworked earlier this year was less than 52 hours per week. You do not meet the 60 hour overwork death criterion. So Coupang insisted that he is not “overworked.” However, when making an occupational accident judgment, in the case of night work, the actual working hours are multiplied by 1.3 to calculate the working hours. The working hours of the deceased workers exceeded 60 hours. It was a work accident caused by ignorance and error that did not take into account the characteristics of the work environment. That is why another innovation is needed in the direction of reestablishing the concept of working hours in consideration of work intensity, such as the introduction of a system of adding work hours for rocket delivery and early delivery in the tomorrow, and the expansion of autonomy. determination of workers. There is also a need for innovation in the compensation system, including the vacation system, and for internal innovation to address relationships between workers and management that are shaken by external breaths.

Responding to sustainable climate change is also a task. The World Economic Forum (WEF) predicts that delivery demand will increase by 78% and delivery vehicles by 36% in the world’s top 100 cities over the next 10 years. The exhaust gas is 32% higher. This is the task that has occurred to domestic courier companies that mainly use diesel vehicles.

All businesses must answer these questions and challenges. In particular, they are asking the government and politics if they are willing to accept the innovation.

Kim Ki-chan, Employment and Labor Reporter