Coupang braces for increased competition amid fallout from South Korea data breach

Core Viewpoint - Coupang is facing significant challenges following a massive data breach that has led to a decline in user trust and financial performance, while also contending with potential regulatory changes that may increase competition in the e-commerce sector [1][5]. Group 1: Data Breach Impact - A data leak in November affected approximately 34 million users, exposing personal information but not payment details or login credentials [2]. - The Science Ministry's investigation attributed the breach to management failure rather than a sophisticated cyberattack, indicating a need for improved safeguards [3]. - Consumer trust in Coupang has been notably shaken, impacting its market position [3]. Group 2: User Engagement and Financial Performance - Coupang's monthly active users on mobile fell by 3.5% in January compared to November, while rival Naver saw a 23% increase in the same period [4]. - Average daily consumer spending on Coupang decreased by 6.3% to approximately 139.2 billion won ($97 million) in January from November [4]. - Analysts have reduced their average fourth-quarter revenue estimate for Coupang by 2.2% and core earnings estimates by 6.7% [5]. Group 3: Competitive Landscape and Regulatory Changes - Coupang's shares have dropped around 34% since the data breach disclosure, while shares of traditional retailers and logistics firms have increased [5]. - Proposed regulatory changes may weaken Coupang's competitive edge, particularly regarding its "Rocket Delivery" service, as the government plans to ease late-night restrictions for hypermarkets [6]. - Rivals such as E-Mart, Kurly, and Naver are expanding their fast-delivery services to challenge Coupang's market dominance [7].