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[이코노믹리뷰=박정훈 기자] Coupang’s OTT’Coupang Play’, an e-commerce company that became a hot topic just by rumors, finally took shape. Coupang is taking a step closer to completing the’Amazon Business’ like their role model. With this, Coupang has completed a competitive structure that faces face-to-face with global companies. With OTT, they will face Netflix, the strongest in tradition, and Disney+, which will launch Korean service in 2021. In addition, it is expected to confront Amazon, whose main business is e-commerce, where Korean business expansion in any form has been confirmed. In response to Coupang’s drastic challenge, expectations and concerns are mixed in the industry.
Coupang completes Amazon business
Amazon operates its own paid membership service,’Amazon Prime’. This service pays a monthly membership fee of 12.99 dollars (about 14,300 won) or an annual membership fee of 119 dollars (about 219300 won) and enjoys the benefits of special members. Amazon Prime members receive various benefits such as free delivery and same-day delivery service when purchasing Amazon products, participation in special discount exhibitions for Prime members, and unlimited use of video and music streaming services.
Here, the equivalent of video streaming is Amazon’s OTT,’Amazon Prime Video’. This service can use only OTT service, not a package subscription belonging to Prime. The usage fee is about 8.99 dollars (about 10,000 won) per month. In addition to the shopping benefits of Amazon shopping customers, unlimited enjoyment of video content is a factor that keeps the subscription service going, and for prime video customers, it is also a factor that leads them to subscribe to Amazon Prime. In fact, according to Amazon statistics, about 10% of Prime Video members, which have about 50 million members worldwide, flow into Amazon Prime every year.
Coupang Play also benchmarked Amazon’s method almost exactly as it always has. According to Coupang’s explanation, Coupang Play is a video streaming service that allows you to enjoy various video contents such as movies and TV series at home and abroad for unlimited time and place. If you are a member of Coupang’s paid membership’Wow’, it costs 2900 won per month at no additional cost. Unlimited streaming service is available. It is similar to Amazon Prime Video in that Coupang has the meaning of’benefits’ provided in addition to the early morning delivery, free delivery, and special discount provided to existing WoW members. Do. However, it is different from Amazon Prime Video in that it cannot use the OTT service separately.
With this, Coupang has built a business in the same form that Amazon has a business group that connects e-commerce platforms, logistics (FBA), and content (prime video) to each other. The big division of business is that it has almost on the surface of Amazon’s flagship businesses excluding the cloud (AWS) sector.
Coupang vs Amazon
Amazon’I don’t know exactly what it will look like’, but by linking with 11th Street, it has virtually confirmed its expansion in Korea. No one really knows whether this will be a joint venture business with 11th Street or the form of Amazon’s exclusive e-commerce Korean subsidiary. However, in any way, Coupang was forced to compete with the Amazon brand.
There are two main views to interpret this situation. First, although Amazon is a global company, Coupang is a brand that boasts absolute recognition in e-commerce only in Korea. It is a point of view that it is not easy to beat Coupang in Korea even if Amazon is about collaboration with other brands. The second is a view that presupposes that Amazon decides to invest large capital for Korean business. If Amazon acquires major domestic e-commerce companies and secures an optimized logistics infrastructure in Korea, and establishes its subscription service and artificial intelligence device’Alexa’, Korean e-commerce will become the Amazon plate just like the US or Japan at that moment.
The key to Coupang OTT
Having decided to launch the OTT service, Coupang must show’charm’ enough to induce additional customers through its paid membership through the service. To this end, it is necessary to compete with well-known services such as Netflix, an absolute powerhouse of OTT, Disney Plus, which starts Korean service in 2021, Amazon Prime Video, which starts Korean service this year, and domestic OTT Watcha, Wave, and Teabing. Although there is a high recognition of the brand Coupang only in Korea, it is not enough to attract customers with Wow membership through OTT service. It should provide a factor in choosing Coupang Wow membership over other OTTs. Considering this, the monthly service fee of 2900 won is competitive in terms of price. Offering Coupang’s shopping benefits and unlimited video streaming service for 2,900 won per month is not a bad condition in terms of price.
The key is not price, but what content to provide to customers. OTT’s customers choose the service with the most important point of view, not the price, but what video they can see. In response, Coupang said, “We plan to release contents that can only be viewed in Coupang Play sequentially.” Given the real conditions of Coupang, it’s very unlikely that this would mean creating original content like Netflix or Amazon Prime Video. Therefore, first of all, it seems to be important for Coupang to have relationships with various external entities that can provide quality content.
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The key is’to gather people’
In summary, the core of Coupang’s Amazon-style business completed with its OTT is’platform membership’. It is about gathering people (consumers) who can buy products, making them loyal customers in the long term, and making them a platform that is attractive to sellers as well. The business of this connection has proven its success with Amazon. In addition, it is positive for Coupang that there are currently no domestic companies that operate OTT among companies aiming for e-commerce platform business. The fact that even Naver, the’designer’ of Korean e-commerce, does not yet service OTT, can be an excellent opportunity for Coupang.
Regarding this, Professor Song Sang-hwa of Incheon National University said, “Since the success of e-commerce depends on making people gather, whether it is buyers or sellers, Coupang’s choice of trying to link OTT, logistics, and e-commerce can be evaluated quite positively.” Is now the default (default) for Coupang, and Coupang’s attempt to take a leap forward by pursuing something more is meaningful.”
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