South Korea’s Coupang faces consumer backlash over deadly fire

Coupang, the South Korean ecommerce group backed by SoftBank, is facing a wave of consumer boycotts over its handling of a fire that killed one person and destroyed its biggest logistics centre.

The public furore over the incident marked the latest setback for the company, which raised $3.5bn in a blockbuster Nasdaq listing this year, as founder Bom Kim accelerates plans for Coupang’s expansion overseas.

More than 7,000 people have joined public petitions on South Korea’s presidential office website calling for Coupang executives, including US-based Kim, to be held accountable over workplace safety and labour practices.

“I loved Coupang’s convenience but I don’t feel comfortable as it was made possible by others’ pain,” said Choi Byung-hyun, a 59-year-old retiree, who said he had cancelled his membership with the company.

South Korean officials said the blaze, which started on Thursday at a Coupang warehouse 80km south of Seoul in Deokpyeong, was believed to have been caused by an electrical fault. A firefighter died after being trapped inside the building.

Coupang, the ecommerce market leader in South Korea, has apologised for the fire and promised support for the bereaved family of the firefighter and salary payments for 1,700 employees unable to work at the warehouse because of the blaze.

The company’s March IPO pushed its biggest backer, Japanese technology group SoftBank, to record profits last year.

But Coupang, whose valuation touched $118.3bn immediately following the IPO, has come under pressure from investors after disappointing first-quarter results that showed widening losses despite a sharp boost in revenues.

Investors said the fire came at a bad time for Coupang as competition intensifies in South Korea and the company seeks to expand into Singapore and Japan.

“The company has failed to meet people’s expectations in its way of handling major accidents . . . the greater public scrutiny will lead to increased costs,” said Choi Joon-chul, chief executive of VIP Research and Management in Seoul.

The logistics centre blaze also followed allegations of overwork at Coupang sites over the past year by unions, South Korean politicians and the family members of deceased employees and subcontractors.

Coupang has denied claims that the company was responsible for the deaths of employees. In response to criticism, Kim has said that the company has invested hundreds of millions of dollars in automation to help workers.

However, Kim himself was targeted in one petition to South Korea’s presidential Blue House over the fire.

“If there is no legal cost for these founders, it is the same as giving the green light to this kind of business practice . . . at the expense of public health and safety,” the petition said.

Asked about the consumer backlash, Coupang said in a statement to the Financial Times: “We believe that our customers appreciate our commitment to safety and value the fact that we were able to evacuate all 280 workers within five minutes of the discovery of the fire, without a single worker harmed.”