November 21, 2024

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Coupang's second fulfillment center in Taoyuan City, Taiwan. (Coupang)

South Korean e-commerce giant Coupang has set up its first overseas distribution unit in Taiwan in an apparent move to boost its presence in the burgeoning retail market there, according to industry sources Monday.

The new subsidiary, named Haitong Shangmao, specializes in distributing locally produced daily necessities from Coupang’s fulfillment centers to customers.

A Coupang official also confirmed the establishment, which he said is part of the company’s expansion plans for its signature overnight shipping service, Rocket Delivery.

Following its entry into Taiwan in 2021, Coupang launched Rocket Delivery in October 2022 there. Since the launch, the company has seen both sales and membership more than double in the second quarter of 2023. Last year, the company also opened its second fulfillment center in Taoyuan City, northeast of Taiwan.

"Since the business in Taiwan is believed to not yet have stabilized to the scale of Korea, they are first attempting to strengthen the Rocket Delivery service through the operation of a separate corporation," an industry expert said under the condition of anonymity. "In Korea, Coupang’s logistics, delivery and fulfillment businesses are all managed by subsidiaries under the parent company."

During last year’s conference call, Coupang CEO Kim Bom highlighted the growth potential of Taiwanese business, saying "Taiwan is another investment that far exceeds our expectations."

“So far, Taiwan has far surpassed this benchmark. Given these advances, we will invest more in Taiwan," Kim added.

As of 2023, Coupang’s total investment in Taiwan reached 8.53 billion Taiwanese dollars ($265 million). The company also plans to build a third fulfillment center this year there.

By Hwang Joo-young (flylikekite@heraldcorp.com)