[News Space=Reporter seung won lee] Coupang is experiencing a rapid decline in customer trust due to the personal information leak of 33.7 million people, and various side effects such as user loss, loss of sales, and boycotts are becoming a reality.

On November 29th, Coupang officially announced that approximately 33.7 million customer accounts had been exposed without authorization, marking the largest data breach since the 2011 Cyworld and Nate hacks. The leaked information included names, email addresses, phone numbers, shipping addresses, and some order history. Fortunately, payment information and credit card numbers were not exposed.

Customer churn and sales losses become a reality.

Coupang's daily active users (DAU) actually increased to 16.25 million at the beginning of the incident (November 29), but then increased to 17.8 million as of December 2, but then fell sharply by more than 180,000 from 17.98 million to 17.8 million in two days, turning into a downward trend.

This suggests that while there was a temporary increase in access following the leak, with users changing personal information and attempting to withdraw their membership, customer dissatisfaction and withdrawal have since intensified. In particular, withdrawals are on the rise as consumer disappointment with Coupang's post-event response, including its delay in publishing an apology and its use of the term "exposure" instead of "leak," has grown.

Complaints about complicated withdrawal procedures and government investigations… even a hearing on Coupang.

Consumers who wish to cancel their membership have pointed out that Coupang's withdrawal process is extremely cumbersome. They must switch from the mobile app to the PC version and undergo up to six steps, including identity verification, usage history review, and a survey. The Korea Communications Commission is conducting an urgent fact-finding investigation into whether Coupang's procedures constitute "an act that restricts users' right to cancel" under the Telecommunications Business Act.

According to political sources on the 5th, the ruling and opposition party floor leaders of the National Assembly's Science, Technology, Information, Broadcasting and Communications Committee agreed today to hold a Coupang hearing on the 17th. The plenary session on the 9th will also adopt plans for the Coupang hearing and the confirmation hearing for Kim Jong-cheol, the nominee for chairman of the Broadcasting, Media and Communications Committee.

Although an urgent inquiry was conducted on the 2nd regarding the large-scale customer personal information leak, the decision was made based on the judgment that further investigation at the National Assembly level was necessary. According to the Act on Testimony, Appraisals, etc. in the National Assembly, requests for witness appearance must be made at least seven days prior to the hearing.

Boycott and Legal Response

This incident has led to a widespread consumer boycott, with 14 victims each filing a lawsuit seeking 200,000 won in damages. The number of class action lawsuit participants continues to grow through online forums. Coupang's lax response and lack of transparency, including understating the extent of the damages and then later correcting them, are exacerbating consumer distrust.

Coupang's Market Position and Future Prospects

JP Morgan predicted that "Coupang's unrivaled position in the e-commerce market will limit customer defections," but added that "significant one-time losses are expected due to voluntary compensation packages and potential government fines." However, concerns are also being raised that Coupang's market position could be jeopardized in the long term due to a cooling consumer sentiment.

Coupang's de facto owner, Chairman Kim Beom-seok, remains a mystery, and he's being criticized for evading responsibility, much like MBK Chairman Kim Byung-joo.

As the Coupang personal information leak scandal worsens, negative public opinion is growing about the absence of Chairman and de facto owner Kim Beom-seok. While Chairman Kim is publicly identified as the final decision-maker for the Korean subsidiary, he has remained silent, remaining in the United States, without issuing an official apology or statement since the incident.

The National Assembly and consumer groups are criticizing Chairman Kim's "uncommunicative management" and evasion of responsibility, and are criticizing him for using Coupang CEO Park Dae-joon as a "punching bag" to shift blame. Furthermore, Chairman Kim was embroiled in controversy over his evasion of legal responsibility after a 2021 logistics center fire, when he resigned from his positions as chairman of the board of directors and registered executive of the Korean corporation.

MBK Partners Chairman Kim Byung-joo is also the subject of fierce criticism. He has been embroiled in controversy over his "dine-and-dash" behavior, evading responsibility whenever a series of accidents or management deterioration occurred at the companies he acquired, claiming, "I don't get involved in the management of individual companies." He is also facing strong criticism for failing to keep his promise to invest 1 trillion won and instead focusing on capital recovery, weakening the company's competitiveness. Despite pressure from politicians and consumer groups, Chairman Kim has avoided appearing at the National Assembly, citing overseas business trips as a reason, further fueling negative public opinion.

Anti-national sentiment is rising, with black-haired foreigners with American citizenship and a large number of Chinese employees.

In particular, Chairman Kim Beom-seok and Chairman Kim Byung-joo are facing a barrage of negative publicity in Korea due to their status as "black-haired foreigners" with American citizenship. While operating trillions of won worth of businesses in Korea, the two appear to be using their American citizenship and complex governance structures to evade legal and policy responsibilities. Chairman Kim graduated from Harvard and resides in the United States, and Coupang's headquarters are located in Delaware. People Power Party lawmaker Kang Min-guk strongly criticized this, saying, "They're making money in Korea but failing to take responsibility."

The management's evasion of responsibility and lack of accountability surrounding Coupang is fueling public distrust and aggravating public opinion, significantly damaging not only the company's image but also the credibility of the Korean e-commerce market as a whole. Amidst growing pressure from the government, National Assembly, and consumer groups, there is growing demand for responsible action and transparent management.

A person related to the distribution and e-commerce industries pointed out, "This Coupang personal information leak is not just a simple security incident, but is causing a serious crisis in customer trust and market position, and the complicated withdrawal process and lax post-response response are leading to boycotts and legal action." They added, "Unlike the personal information leaks caused by hacking in the telecommunications industry such as SKT and KT, public resentment and even accusations of treason have all come together at once, making public opinion even more negative."