Coupang – an organization likened to “Korea’s Amazon” – helped founder Bom Kim as soon as owned a fortune of as much as $8.9 billion. Kim is a first-rate instance of a brand new technology of billionaires who constructed their fortunes on their very own within the tech sector as an alternative of being the heirs to established firms.
Kim, 42, was born in Seoul, moved to the US at a younger age and later turned an American citizen. He returned to Korea and began Coupang in 2010 after dropping out of Harvard Enterprise College.
As we speak, Coupang is essentially the most used buying app in South Korea and one of many nation’s largest employers. Income practically doubled final yr to $12 billion as demand for on-line buying surged through the Covid-19 pandemic.
Backed by Masayoshi Son’s SoftBank Group, Coupang raised $4.6 billion in its IPO regardless of the corporate recording a web loss for years. The corporate’s shares surged on the primary buying and selling day. Though Kim’s fortune has fallen since its peak, he nonetheless has an estimated fortune of $5.7 billion, in keeping with the Bloomberg Billionaires Index.
Mr. Bom Kim. Picture: Bloomberg.
Earlier than the fireplace incident on June 17, Coupang was acknowledged within the eyes of the Korean public as a know-how company with completely different company tradition than most different firms – able to dedicate for society and care extra about staff. For instance, Coupang pledged to staff and management positions inside the firm $90 million value of bonus shares when it listed in New York in March.
Nevertheless, just some months after the preliminary public providing, the e-commerce large is underneath strain from a collection of controversies and public judgment in opposition to the corporate and its head. its – Bom Kim.
Coupang faces renewed criticism from labor unions and clients over working circumstances. The trigger got here from a lethal hearth at a middle that was being accomplished in June. At one level, the variety of clients utilizing the platform each day fell by greater than 700,000 individuals amid the corporate’s boycott following the corporate’s boycott. hearth incident. On the identical day of the fireplace, Mr. Kim introduced his resignation as Chairman and CEO of Coupang Korea. The general public seen this motion as an abdication of accountability.
Coupang mentioned that Kim’s departure from two senior positions in South Korea took impact from Could 31 and the timing of the announcement was only a coincidence. The founder stays Chairman and CEO of father or mother firm Coupang Inc. The transfer might assist Kim keep away from accountability underneath South Korean legal guidelines and laws.
Coupang’s order transport hub. Picture: Coupang.
Within the data despatched Bloomberg, Coupang mentioned, it cares “deeply for the welfare of all staff” and takes its “accountability to guard the well being and security of employees” severely. The corporate additionally strives to create a extra equal working setting. Relating to Kim’s resignation, this data was made public by means of a authorities web site previous to the fireplace and the timing of the announcement was only a coincidence. The plan to step down was additionally introduced months in the past and is a becoming step for his subsequent work, which is predicted to deal with actions on a world scale.
The fireplace led to a boycott of Coupang’s companies. The variety of each day customers of the corporate’s cellular app dropped to about 7.9 million on June 26, in contrast with about 8.6 million customers on the day of the fireplace, in keeping with information from Korean market analysis firm Cell Index.
Criticism has grown that the conveniences provided by Coupang, corresponding to assured next-day supply, depend in opposition to employees’ earnings.
In response to Coupang, the corporate has lowered the workload for administration positions though the working hours of staff within the logistics space have elevated. The corporate’s administration positions work “underneath 50 hours per week on common in an trade the place 72 hours per week is the norm.” And the best way it helps to realize that is by means of the corporate’s use of know-how and Nationwide community with greater than 100 logistics facilities and recruiting much more personnel.
Nevertheless, most warehouses would not have air-con or heating techniques and staff are usually not allowed to convey telephones. “We really feel like we’re being handled like machines,” mentioned Min, a 55-year-old worker. For Coupang, “the product is an important factor,” he mentioned.
For this, Coupang mentioned, air conditioners and enormous followers have been put in relying on the state of affairs of every area in its distribution facilities. As a basic coverage, operations facilities around the globe don’t permit using private cell telephones on the ground to forestall accidents. Many different companies, particularly manufacturing vegetation, have some restrictions on using telephones within the office.
Coupang has been on the forefront of making “a brand new working setting for logistics”. The corporate is dedicated to making sure shorter working hours, hiring direct management employees, and introducing paid holidays and break day and different advantages to staff.
Coupang’s labor union mentioned 9 employees, together with two subcontractors, had died working on the firm since early final yr. In response, Coupang mentioned that whereas the logistics trade in South Korea has had greater than 1,300 work-related deaths prior to now 10 years, the corporate has solely considered one of them. The corporate additionally spent $200 million and recruited 600 well being professionals to enhance the well being and security setting for its employees.
In Could, Coupang launched Coupang Care. It’s the trade’s first paid wellness program in Korea, permitting staff with comparatively excessive well being metrics like blood strain and blood sugar to take as much as 4 weeks of paid break day to focus. into well being restoration.
Up to now, the variety of customers has proven indicators of restoration. Throughout a monetary information convention final week, Coupang mentioned buyer purchases within the second quarter elevated 26% year-over-year to 17 million.
On the identical time, within the second quarter, Coupang recorded an elevated web loss after spending a big quantity on growth and cleansing up the aftermath of the fireplace. The corporate’s shares have decreased by 7.5% in comparison with the itemizing till the tip of August 18.