Coupang's private label product strategy revealed in Korea Fair Trade Commission investigation

The Korean online retailer Coupan selected popular products from suppliers and sold them as private brand (PB) products. The details of this were revealed in an investigation by the Korea Fair Trade Commission (KFTC).
According to the FTC's resolution on the 29th regarding "Coupang's unfair customer inducement and unfair practices," Coupang analyzed the product production process and sales data of its suppliers and
The FTC said, "Coupang uses products that have high sales volume and profitability and simple production processes among the products sold on its online shopping mall as private brand products.
Specifically, Coupang selects PB products from among the top 100 products in each category that have high sales volume and profits and simple production processes.
After the launch of the PB products, the company established a "dual-use" company, which is both a seller and a platform for the products.
The FTC found that Coupang engaged in unfair practices, such as manipulating search algorithms and having employees create reviews, in the process.
However, the FTC did not determine that this method of selling PB products violated the law. This is because Coupang was not able to analyze the sales data of products it purchased directly, nor was it able to determine whether the PB products were being sold.
This is because the products involved are mainly mineral water and wet tissues, which are easy to produce, making it difficult to consider this to be technology theft.
However, the FTC has decided not to take any action against the unfair preferential treatment of private brand products, such as the manipulation of search algorithms.
The court ordered the company to correct its actions and imposed a fine of 162.8 billion won (US$177 million) on the company, citing the illegal customer solicitation. Coupang has filed an administrative lawsuit against the company, appealing the decision.