Coupang’s Pressure to Maintain Profitability: Cutting Supplier Costs and Demanding Advertising Spend – A Turning Point for the Market?

Recent reports indicate that Coupang is responding to pressure on its profitability by simultaneously pursuing strategies of cutting supplier costs and increasing advertising expenditure. This move raises significant questions about Coupang’s business model and the sustainability of its operations, prompting deeper discussions about the revenue structure and long-term viability of platform companies. Considering the market conditions of 2026, the success of this strategy will be a crucial factor in determining Coupang’s future growth potential.

Coupang’s Crisis: Pressure on Profitability and a New Strategy

According to a recent report in 한경, Coupang is pursuing a strategy of cutting supplier costs and simultaneously increasing advertising expenditure in response to pressure on its profitability. This move indicates a shift from Coupang’s traditional strategy of focusing on rapid delivery and customer experience to a new approach aimed at securing profitability. The market conditions of 2026 are expected to present a more challenging environment for Coupang due to intensifying competition and increased consumer price sensitivity.

Background of Cutting Supplier Costs

The reduction in supplier costs is driven by Coupang’s declining profitability. In a platform business model, Coupang generates revenue by lowering product sales prices while relying on advertising revenue and data sales. However, with increased competition, the pressure to lower sales prices has intensified, leading to a decrease in profitability. Therefore, Coupang must improve supply chain efficiency and reduce costs to restore profitability.

Significance of Increasing Advertising Expenditure

Increasing advertising expenditure is part of Coupang’s strategy to diversify its revenue streams. Coupang needs to reduce its reliance on product sales revenue and increase advertising revenue. Specifically, in 2026, with the further development of AI-based advertising technology, Coupang must improve advertising efficiency through AI advertising.

Changes in the Market Competition Environment

Coupang’s strategy is a response to changes in the market competition environment. Competitive platform companies are likely to pursue similar strategies. Therefore, Coupang must continue to innovate to maintain its competitive advantage. Utilizing FireMarkets’ market analysis tools can help to monitor changes in the competitive environment in real-time and develop appropriate response strategies.