Jeon Woo-oak has the numb, strained aspect of someone forced to grieve in the public eye. It has been months since she recovered from Covid-19, but she is still nervous in public spaces, preferring to meet in a rented private study rather than a cafe. “I’m worried I might get it again,” Jeon says.
In late May, an outbreak of the novel coronavirus swept through a warehouse owned by the e-commerce company Coupang in Bucheon, South Korea, where Jeon, 45, worked. Jeon caught the virus and brought it home to her 23-year-old daughter and husband. She asked for their names not to be published, to protect their privacy.
After their diagnoses, the three shared a room at the Incheon Medical Center. They spent the first few days keeping each other in good spirits, discussing what to eat when they got out. But without warning, the infection spread to Jeon’s husband’s lungs, where the damage it inflicted appeared in X-rays as ghostly white blots. At around noon on June 7, her husband video-called from the intensive care unit, assuring Jeon that he was fine. About four hours later, he suffered cardiac arrest, then fell into a coma.
“He’s been unconscious for three months, but he’s not going to get any better at this point, so I have to move him to a long-term care facility this weekend,” says Jeon. “But they can only manage his condition there. If he develops pneumonia again, I’ll have to move him back to the hospital.”
Jeon began working at Coupang, the biggest player in South Korea’s e-commerce market, in April. At the time, the Bucheon facility — a six-story refrigerator where fresh food products are stored and packaged for delivery to the surrounding greater Seoul area — was one of the few places hiring. Jeon’s husband had been furloughed, and the family was struggling to make ends meet, so she signed a three-month contract.
On the morning of May 24, authorities reportedly called Coupang to notify them that a Covid-19 case had been traced back to its Bucheon warehouse. Work was suspended for three hours while the facility was disinfected. When Jeon came in later that afternoon, at 5 p.m., shift managers had already made the announcement to the hundreds of workers packed into the narrow foyer. When Jeon and her colleagues asked where in the facility the infections had been traced to, they were rebuffed. “Then they told the rest of us to go to our workstations, saying we were safe,” she says.
Even before the outbreak, the risks of working in a windowless warehouse, where everyone breathed the same stale air, had been obvious. “We would always tell each other, ‘When it happens here, it’s going to be a complete disaster. We are all going to die,’” recalls Jeon.
She took every possible precaution, using her car instead of the employee shuttle and the stairs instead of the elevator. During her shift, she wore a mask and gloves. Not wanting to wait in the long line for the cafeteria, where people would eat crammed together with their faces uncovered, she skipped dinner. It wasn’t enough. The Bucheon warehouse carried on as usual, until the evening of May 25, almost two full working days after officials were warned of a possible outbreak. Jeon tested positive on May 26. In total, there were 152 Covid-19 cases traced to the warehouse: 84 employees, as well as 68 others infected from subsequent contact.
Jeon holds the company responsible for failing to take the necessary precautions to prevent the outbreak. “I’ve told Coupang that my husband is extremely ill, and that I want both a sincere apology and compensation,” she says.
Coupang declined to comment.
Coupang’s apparent mishandling of the outbreak at Bucheon is embarrassing for a company that styles itself as a socially conscious innovator, one that offered delivery workers secure, full-time jobs while revolutionizing Korea’s e-commerce industry, the fifth largest in the world. But to stay ahead of its rivals, the company has driven its employees harder and harder, trying to win by turning around orders faster than anyone else. This year, at least two workers have died — in March, a Coupang delivery man was found dead on the steps of a residence where he had been delivering packages, and in May, a worker, in their 40s, at another Coupang warehouse died after collapsing in a bathroom. Warehouse workers and delivery drivers describe these deaths as the inevitable outcome of a business ethic that prioritizes rapid delivery over employee safety.
“Even before [the Bucheon outbreak], I’d been struck by how the company seems to treat workplace injuries as a given and what I’ve perceived to be a deep-rooted and widespread problem of neglecting worker safety,” says labor researcher Jang Kwi-yeon, who has studied working conditions at Coupang. “Coupang has grown tremendously in the span of just a few years, and the intensity of work just keeps on increasing.”
When Covid-19 struck, and homebound consumers turned in unprecedented numbers to e-commerce, the pressure worsened, and more workers were put in harm’s way. As another former Bucheon worker told Rest of World: “What was bound to happen has happened.”
Coupang — a portmanteau of coupon and the sound of one going off: pang! — was launched in August 2010 by Kim Beom-seok, a Korean American in his early 30s, as a daily-deals “social commerce” venture modeled on Groupon. Launched with backing from Clayton Christensen’s Disruptive Innovation Fund, it was turning a modest profit by 2012, when Kim — who goes by “Bom Kim” in English — decided to take the company public on the Nasdaq.
The weekend before the listing was due, Bom Kim pulled the plug. His vision, he had said in numerous interviews, was to create something that left customers saying, “How did I ever live without Coupang?” — and his company wasn’t that. From then on, the company would model itself not on Groupon, but on Amazon.
By 2015, Coupang had built something that surpassed even Amazon: a long, unbroken supply chain, whereby products moved seamlessly from warehouse to driver to customer, with 99% of orders delivered within 24 hours, all year and 7 days a week. (Amazon has since made a similar delivery network.) In 2016, Coupang was named one of the 50 Smartest Companies by MIT Technology Review. The same year, Bom Kim appeared on Forbes’ “Global Game Changers” list with the tagline “beating Jeff Bezos at his own game.”
Like Bezos, Bom Kim had rightly predicted that faster and “frictionless” delivery — not just competitive pricing and wide selections — would be the future of e-commerce. And with its dense, smartphone-friendly urban populations, South Korea was close to a perfect market. At the time, a slate of third-party marketplaces and Groupon imitators made up most of the country’s e-commerce sector.
“In modeling itself after Amazon by investing aggressively in its own logistical infrastructure, Coupang swooped in and set an entirely new standard for e-commerce [in South Korea],” says Im Il, a professor at the Yonsei University School of Business in Seoul. “It eventually sparked both a price war and a delivery war across the entire market.”
E-commerce in South Korea was dogged by a challenge common to online retail around the world. So-called last-mile delivery — the stretch of the delivery process in which the package moves from hub to consumer — was expensive, time-consuming, and unreliable when handled by third-party shipping companies. Late, damaged, or lost packages were immensely consequential to customer satisfaction but nearly always out of a retailer’s control.
Logistics, Bom Kim believed, was “a fight of minutes and seconds.” In 2013, Coupang acquired the data-analytics company CalmSea and began to deploy artificial intelligence to pare down delivery times. Machine learning helps the company predict consumption patterns and position stock so that it is closest to likely buyers. In its warehouses, Coupang uses the same “random-stow” system as Amazon, in which algorithms tell stockers where to store items based on purchasing patterns, rather than on category. On deliveries, artificial intelligence software plots optimal routes for drivers and tells them where and how to stack packages in the truck.
To cement Coupang’s control over the last mile, Bom Kim did something that few others in the industry wanted to: he hired his own drivers.
In March 2014, the company launched what has since become its crowning achievement, Rocket Delivery, starting with 50 “Coupang Men” — full-time drivers in branded trucks — who guaranteed next-day delivery of packages, which the company calls “gifts.”
Referred to internally as “spreaders of happiness,” Coupang Men were the spiritual ambassadors of the company. To win over female customers in their 20s and 30s — a key demographic — Coupang Men handed out flowers and handwritten cards, snapped photos of packages to confirm delivery, and would know not to ring the doorbell at homes with babies.
Bom Kim called them “the weapon that Amazon doesn’t have.” And unlike local shipping companies, which hired fleets of drivers on precarious temp contracts, Coupang Men were given a fair wage, full insurance coverage, annual health checkups, 15 vacation days a year, and company trucks and gas.
More importantly, the company offered drivers the opportunity to become “regular” employees in a line of work where this was virtually unheard of. (In South Korea, employees are divided into “regular” and “irregular” labor, with only the former receiving comprehensive legal protection.)
To execute this vision, Bom Kim courted talent from his competitors — including Amazon — who recognized in Coupang a similar, single-minded zeal. “I was very impressed with the strategy and control of the last mile,” Darrin Shamo, who left Amazon-owned shoe retailer Zappos to become Coupang’s chief marketing officer in 2015, told Rest of World. “There [was] an equally maniacal focus on the customer experience. Both [Amazon and Coupang] obsess over millisecond improvements in page-load times, breakneck delivery times, vast selection, and customer empowerment.” Shamo left Coupang in 2016 and later joined the U.S. food-delivery company DoorDash.
Big name investors got behind Kim’s vision. In late 2014, less than a year after launching Rocket Delivery, Coupang raised $300 million in a financing round led by BlackRock. In June 2015, SoftBank pledged to put down $1 billion at a $5 billion valuation. SoftBank’s Vision Fund followed up with another $2 billion in 2018, this time valuing Coupang at $9 billion. Since 2010, the company has raised an estimated $3.8 billion, according to investment database CB Insights.
These massive cash injections have allowed Coupang to pursue a growth strategy known as blitzscaling. The approach, applied by splashy disruptors such as Uber and WeWork — both backed by SoftBank — rests on the idea that scaling a novel service in an untapped market as quickly as possible lets a company secure an early advantage and outrun competition. Often, this has meant operating at a substantial loss and burning through investors’ money to win market share. The viability of blitzscaling has been tested over the past couple of years. WeWork’s IPO had to be pulled after investors questioned whether it could ever turn its market position into profit. Uber has disappointed since its listing in 2019 and lost $8.5 billion last year.
SoftBank’s lavish investments have helped Coupang on its way to becoming the market leader in South Korean e-commerce. Half of South Korea’s population of 51 million has downloaded the company’s app. Its Rocket Delivery Habitat — a vast latticework of logistics outposts — is so comprehensive that nearly 70% of South Koreans live within 10 minutes of a Coupang hub. The company has branched out into food delivery and fresh groceries and, in 2018, began offering “Dawn Delivery,” which guarantees that any one of Coupang’s two million unique items will be at your door by 7 a.m. if the order is placed by midnight the previous day. Bom Kim is now South Korea’s second-youngest billionaire.
This has come at a price. Although Coupang’s annual revenue has grown exponentially, reaching $5.9 billion in 2019 — a 64% increase from 2018 — the company hasn’t turned a profit in years. Payroll costs have increased fourteenfold since 2014, and the company recorded more than $1 billion in operating losses in 2018 and $593 million in 2019.
“I’m still skeptical whether Coupang can even make up its losses and become profitable at this point,” says Im, the business school professor. “It’s true that they’ve secured a sizable share of the market through their aggressive logistical expansion, but under their current model, this increased share will just lead to a proportional increase in losses.” Coupang, in his view, has dug itself into a hole: By dragging down prices to capture consumer loyalty, it has left little room to actually make money. “They can’t suddenly raise their prices now,” says Im. “But their operating costs can’t get any lower either.”
The toll of this rapid growth is not only financial. The pace of expansion and the demand for maximum speed and efficiency have placed an enormous burden on the people who work fulfilling Coupang’s orders.
Around 11 a.m. on September 8, Tae-il, a Coupang Man in his 40s who requested anonymity out of fear of retribution from the company, rolled up in his white one-ton Coupang truck outside an apartment building in Gimpo, a satellite city of Seoul, about an hour’s drive north of Bucheon. These high-rise suburbs have sprouted up all around the overpopulated capital. The apartments embody the same sort of one-stop-shop convenience that has defined Coupang: Amid groves of red pines, there is a senior center, a “mom Center,” a daycare, a library, a nature museum. Everything has a slightly unsettling new sheen.
Tae-il, who is stocky with shaggy hair, is wearing his Coupang polo and navy-blue wraps on his arms and knees. He has just picked up the 300 or so packages he will be delivering today from the nearby delivery camp. These apartments are his first stop.
“I have 180 homes today,” he says by way of greeting. His truck is one of the newer models, which supposedly eliminate dead space with sliding side doors that open into three horizontal shelves. The truck is packed to the brim, with boxes squeezed into even the passenger seat. When Tae-il yanks the sliding door open, an avalanche of stuff spills out. Asked how the AI system that orchestrates the loading process works, he answers with an exasperated laugh: “AI? It’s humans that do this work.”
Before running into each block with a cartload of packages — which today include boxes of ramen, coffee, lots of bottles of water and toilet paper, a foam roller, an air fryer, and countless mysterious Rocket Delivery boxes — he consults his work smartphone, on which an app displays the order of each delivery and flags any refunds. He has a well-tested method: At each floor, Tae-il runs out and deposits the packages at the door, snaps a verification photo while walking backward into the elevator, and punches it into the app. By 12:30 p.m., he’s hit 37 homes and is lightly panting.
Before becoming a Coupang Man two years ago, Tae-il was an educator.(Coupang recently changed the term Coupang Man to the more inclusive “Cou-chin,” a portmanteau of Coupang and the Korean word for “friend.”) Although the company likes to advertise delivery jobs as long-term careers for young men, in reality, says Tae-il, it has become a landing spot for down-and-out men in their 40s and 50s. “There are lots of people who signed up after their businesses failed.”
Far from the idealized image of the Coupang Man as a “spreader of happiness,” Tae-il, who works 52 hours, five days a week, has a beleaguered air about him. When asked why he’s not writing any personalized letters or dropping off candy, Tae-il sneers. “Not a single person does that anymore. If you do, you get called an idiot. And you will probably get written up for not making deliveries,” he says.
“Anyone in their right mind ends up quitting. The ones who stay and tough it out do it because they have no choice.”
Since the early days of Rocket Shipping, delivery loads and deadline pressures have steadily increased, and the pandemic has ratcheted things up even further. According to data compiled by the Coupang drivers’ union, average individual delivery loads increased from 57 packages a day in 2015 to 242 in August of 2019. By February 2020, near the peak of the pandemic in South Korea, it had risen to 340.
Despite the growing delivery volumes, Tae-il says that wages have effectively dropped or stagnated, partly because the company has recently stratified Coupang Men into “levels.” Rookie drivers are now automatically assigned to the “light” level, where they are paid minimum wage and assigned 75% of “normal” drivers’ loads, until they can prove their capacity to do more work. New drivers begin on irregular contracts and are eligible to turn regular only after a minimum of two years with the company. Coupang says that this system was introduced to give drivers the freedom to decide how much they work, but in reality, says Tae-il, the rising individual workload has simply turned “lights” into a less secure, minimum-wage version of what “normals” used to be. Although Coupang likes to point out that “over 90%” of drivers who have met the two-year eligibility requirement transition to regular contracts, Tae-il says this is because over 90% of drivers quit within a year, according to the union’s data. “Anyone in their right mind ends up quitting,” he says. “The ones who stay and tough it out do it because they have no choice.”
The pressure of performance-based promotion and incentives means that drivers feel constantly under the gun. This, Tae-il says, has led to accidents, like drivers tumbling down the stairs or getting into traffic collisions between routes, but many are reluctant to call in sick for fear of being denied contract extensions.
In March, a Cou-chin in his mid-40s, publicly known by only his surname, Kim, was found dead by a colleague on the steps of a residence in Ansan, Gyeonggi Province, after Kim’s supervisor noticed that his progress tracker had gone cold. An autopsy later showed that he had suffered a heart attack. Coupang claimed that as a “light” deliveryman, with fewer than three weeks on the job, he was only carrying around half the standard load. The union countered that that was still an “absurd” amount for a rookie.
Since his death, the company has been reminding drivers to take their one-hour breaks, but Tae-il bets that most of his coworkers will still be working through them. “If they want us to rest, they should assign us loads that actually leave us enough time for it,” he says over lunch at a convenience store. “It’s true that Coupang is a technology company on the outside. But underneath it all are masses of workers like an army of ants.”
Critics of Coupang draw a direct line between the company’s philosophy of speed at any cost and the outbreak at Bucheon.
When Jeon Woo-oak started working at the distribution center on April 28th, she was struck by the place’s near-martial atmosphere and pace. There, from 5 p.m. to 2 a.m., she stood by an industrial conveyor rail on the second floor, packing items, including watermelons and eggs, into boxes that would then be overnighted to their destinations. To stay warm in the chilled air, she wore her long padded parka. On her way home, she saw Coupang Men hurrying to make deliveries by the 7 a.m. delivery deadline.
Outside of the hour-long meal break, “there wasn’t even a second or minute to rest during the day,” she recalls. “After one ten-day stretch, every part of my body was swollen — arms, legs, fingers.”
After Coupang added same-day fresh-food delivery in late April, things became even more frenetic. “From 30 minutes to an hour before each deadline, it was just complete chaos,” Go Geon, a former Bucheon employee who worked the same shift as Jeon, says. “Everyone starts shouting. Managers run around pecking at you and yelling at you to go faster.”
Like Amazon, which measures its warehouse workers against a “proprietary productivity metric,” Coupang uses a units-per-hour (UPH) measure to gauge worker performance. For packers like Jeon, when things were busy, the required UPH ranged from 70 to more than 100 when things were busy. On-site managers — called captains — monitored individual UPH rates from their computers. When workers fell short, or their UPH inputs went idle for more than a few minutes, they were publicly shamed in what was referred to as an “open execution” among employees. “They’d come to you and shout something like: ‘Did you come here to play around? Hurry up!’” Jeon says.
Coupang does not make its injury data public, but workers say that this frantic pace of work, paired with the fanatical fixation on deadlines, created an environment where injuries, both acute and chronic, were part of the job.
Near the end of his shift on May 8, Go tore his left hamstring while rushing a box to the packers. “I felt a pop in my left leg, but it wasn’t a situation where I could even ask for help, so I ended up hobbling the box down from the fourth floor,” he says.
A former worker at another warehouse described the parade of sprains and fractures on the conveyor rails he heard about over a two-year period. “You’d pull the person down and send them off to the hospital,” he said. “And then the rail always rolls on.”
To complain about these conditions was nearly unthinkable. A recent survey by a local civic group found that, at the Bucheon warehouse, 97% of workers had been hired as highly disposable “irregulars,” whether day laborers or temps on contracts for a year or less. Jeon says that those who protested their ill treatment were threatened with disciplinary write-ups. Among workers, it was rumored that three write-ups meant termination.
“If you’re sick, you either just grit your teeth and show up to work or go to the doctor with the expectation that you might be fired,” Jeon says.
Workers say that basic safety measures — including those to protect against Covid-19 — were regularly overlooked amid the mad dash toward deadlines. Coupang has claimed that the Bucheon facility was disinfected every day, but Jeon and Go deny ever having seen such efforts. “There was a person at the entrance who would squeeze us one small drop of hand sanitizer when we went in, probably because they thought we’d use too much if we did it ourselves,” says Jeon.
Although Coupang claimed it disinfected the Bucheon warehouse on May 24 and 25, health investigators found the virus on shared safety hats and computers just a few days later. Coupang has since blamed the Bucheon outbreak on a patient further up the chain of transmission, who delayed contact tracing by lying to health authorities, but that didn’t stop Jung Eun-kyeong, head of Korea’s Center for Disease Control (currently known as the Korean Disease Control and Prevention Agency), from rebuking the company for its “inadequate prevention measures.”
Shortly before Jeon informed the company that her husband was in a coma, Coupang directed her to employee services, which usually arranges help with simple issues, like pet-sitting and banking assistance. When she finally got a manager on the phone, the voice on the other end chuckled softly before explaining that Coupang had done everything by the book and was, in a sense, a victim of the outbreak as well. In August, the Korea Workers’ Compensation & Welfare Service (KCOMWEL) — the government agency that adjudicates workplace injury and disease disputes — ruled Jeon’s case to be a workplace incident, but Coupang maintains that it followed standard containment procedures and doesn’t take responsibility for the illness of Jeon’s husband. Jeon has since filed a lawsuit against the company, alleging that Coupang failed to adequately protect workers’ health and safety. Coupang denies the allegations.
Go Geon, Jeon’s coworker, went on medical leave shortly after his hamstring injury. While KCOMWEL was deliberating his claim in May, the Bucheon warehouse’s safety-management officer submitted a six-point rebuttal arguing that it was “malicious.” Go’s claim was eventually approved. In late May, he started a support group for the victims of the outbreak, who, in the absence of a formal union, have joined in the larger movement to pressure the company to improve labor conditions in its warehouses.
On top of monetary compensation for workers whose families and livelihoods were impacted by the outbreak, Go and Jeon are both intent on getting a sincere apology. Despite repeated overtures to the company, Go says Coupang has ignored his requests for dialogue. In early September, the Bucheon support group filed a criminal complaint against Bom Kim and other Coupang executives, alleging that they violated South Korea’s infectious-disease and labor-safety laws.
Recently, Go came across a local news story describing the plight of Amazon workers in the pandemic and was floored. “Reading it, I realized it was the exact same thing that was happening to us,” he says. In late July, Go’s support group sent an open message of solidarity to organizations representing Amazon workers. Not long after, Amazon Workers International and the International Brotherhood of Teamsters reciprocated with messages of their own. “This is a global problem,” says Go. “Despite the distance between us, we might as well commiserate with one another.”
Like Amazon, Coupang has thrived in the pandemic. In late January, the company broke its record for total daily shipments. That month, Bloomberg reported that Coupang is preparing for a possible IPO as early as next year. The company has denied that it has set a firm date.
Coupang’s revenue has been boosted by the pandemic, which some believe will bring it closer to profitability by the end of the year. But the business is caught in a bind of its own making, Jang, the labor expert, says. “Because the Coupang isn’t making a profit, it probably can’t afford to hire enough workers, so the only strategy they have at their disposal is to just squeeze the ones they have harder and harder.”
Meanwhile, the company’s innovations have already taken on a life of their own. Same-day delivery has become the new and irreversible norm. Tech giants and brick-and-mortar retail conglomerates alike are jostling for space in an e-commerce market that continues to grow, with many eating huge losses of their own to compete with Coupang. Yet none of this seeming progress has felt like innovation to the company’s workers. “There is nothing sophisticated about this system,” Go says. “It’s just mixing in workers and grinding them up.”
