Small and Medium Enterprises Boom as 'Hetban' Disappears from Coupang... "Sales Increased 100 Times"

Small and Medium Food Companies Surpass Large Corporations' Growth in First Half
Up to 100x Growth "Focusing Only on Products and Services"
Industry: Supply Price Conflict Structure Unlikely to Be Resolved Soon

The power struggle between Coupang and CJ CheilJedang over delivery prices is intensifying. As CJ CheilJedang expands its alliance with distributors excluding Coupang, Coupang fired back, targeting CJ CheilJedang's flagship product 'Hetbahn,' claiming that "with the disappearance of monopoly food conglomerate products, sales of small and medium-sized enterprises (SMEs) and mid-sized companies' products have surged."

Growth rate of sales for small and medium food companies handling instant rice within Coupang
Photo by Coupang.

Analyzing food sales trends from January to May this year, Coupang announced on the 11th that sales of instant rice products from SMEs and mid-sized companies increased by up to 100 times compared to the same period last year. Coupang emphasized, "As monopolistic conglomerates that held over 50% market share in food categories such as instant rice withdrew, emerging SMEs and mid-sized food companies that had not yet climbed the 'ladder of growth' secured new growth momentum."

In the instant rice sector, the top growth rates were all occupied by SMEs and mid-sized companies. The company showing the greatest growth in instant rice was UPC, with sales in the first half of this year increasing by 10,407% compared to the same period last year?over 100 times growth in one year. Sias, which produces CPLB Gomgom instant rice and its own brand 'Urijip Bap,' followed with a growth rate of 7,270%. Mid-sized companies also experienced rapid growth. From January to May this year, premium instant rice from company H grew by 4,760% compared to the same period last year, and instant rice from company D grew by 140%. Mid-sized company O surpassed CJ CheilJedang in sales volume within Coupang.

SMEs and mid-sized companies also benefited in categories such as instant soup and frozen dumplings. In the instant soup category, sales of SME Gyodong Food in Okcheon-gun, Chungbuk, increased by about 60% in the first half compared to the same period last year. In the frozen dumplings category, Chuiyounglu, which started as a Chinese restaurant in Myeongdong, grew by 61% compared to the same period last year. SMEs and mid-sized food companies evaluated that "a fair sales ecosystem where focus can be placed on product quality and the essence of goods rather than specific brand awareness has been created for the first time in domestic distribution companies through Coupang."

Previously, CJ CheilJedang withdrew from Coupang and built an alliance with distributors excluding Coupang. In March, it entered the 'Guaranteed Arrival Specialty Hall' operated by Naver Shopping, collaborated with 11st's 'Shooting Delivery,' and jointly developed private brands (PB) with Kurly. Recently, it also signed a partnership for joint development of home meal replacement (HMR) products with Shinsegae Group's Emart, SSG.com, and Gmarket.

The industry expects that the delivery price conflict between the two companies will be difficult to resolve soon. Initially, both companies officially expressed only cautious positions that they were "cooperating to find a compromise" regarding the delivery price conflict, but recently both have taken active steps toward methods other than compromise.