Coupang, Amazon under fire for failure to protect employees during COVID-19 crisis

Posted on : 2020-06-02 16:51 KST Modified on : 2020-06-02 16:51 KST
E-commerce giants have seen increased sales during pandemic, but haven’t followed disease control guidelines
Coupang’s logistics center in Bucheon, Gyeonggi Province. (Yonhap News)
Coupang’s logistics center in Bucheon, Gyeonggi Province. (Yonhap News)

South Korea and the US’ top e-commerce companies are taking a beating in public opinion because of their botched response to the COVID-19 pandemic. In the early stage of the crisis, these companies boosted their customer base by delivering essential products to people’s front doors at the click of a button. But now they’re under fire for not doing enough to protect the people working to make that delivery service a reality.

Amazon, the world’s largest e-commerce firm, is facing an onslaught of criticism from investors, stockholders, and politicians for its inadequate protective measures for employees. Despite a string of reports about coronavirus infections and fatalities occurring at Amazon facilities, the company has failed to provide detailed figures or other information. Because US states take different approaches to publishing information about COVID-19 patients and tend to release as least information as possible to protect patients’ privacy, official corporate announcements represent an important source of information.

Another problem is that Amazon hasn’t even abided by disease prevention rules. According to CNBC, the company hasn’t taken steps to ensure that employees are maintaining a safe distance from each other while sorting or packing products; furthermore, employees haven’t even had enough time to wash their hands because of the pressure to fulfill their hourly work quota.

CNN reported that the company isn’t providing critical information to its employees, who are the backbone of e-commerce sales and a consumer lifeline. That lack of information, the broadcaster said, is creating a headache both for employees and for state officials. Overseas media estimate that there are around 900 COVID-19 cases among Amazon employees, eight of whom have died.

Coupang, an e-commerce firm that describes itself as the Amazon of Korea, has exhibited some of the same behavior. While Coupang was informed on the morning of May 24 that a worker at its Bucheon logistics center had contracted COVID-19, the company allowed workers to report for their afternoon shift without immediately informing them of that development.

In subsequent days, Coupang has released two press releases claiming that it had “set up a system when COVID-19 first began to spread in order to prevent transmission from the order phase to the delivery phase” and that it “was implementing intensive disease control measures every day.” But an investigation by the disease control authorities found that the company wasn’t following basic disease control rules, such as having employees maintain distance in cafeterias and other facilities used by thousands of people, and that workers had been sharing the same shoes and hats. Another issue has been the company’s failure to provide information about the number of workers at the logistics center and which assignments were being handled by infected workers when the outbreak was first reported.

Coupang is essentially an overseas company operating in Korea

Industry insiders say that Coupang’s secretive practices have been influenced by international corporate culture. Coupang is completely owned by Coupang LLC, which is based in the US, and all its chief executives — including CEO Bom Kim, Chief Financial Officer Alberto Fornaro, and Chief Accounting Officer Michael Parker — are foreign nationals.

“In terms of corporate culture, the Korean retail industry tends to follow the lead of giants such as Lotte and Shinsegae, but Coupang is effectively an overseas company doing business in Korea. That’s apparently why it doesn’t release information unless it deems it absolutely necessary,” said a source at an e-commerce firm.

“[Coupang] probably didn’t want to respond actively [to negative issues] in light of its efforts to be listed on the Nasdaq and to attract investment,” another source in the industry said.

Both Amazon and Coupang played a huge role in the first phase of the COVID-19 crisis as they rode the wave of people limiting contact with others. But now the crisis — and their response to it — presents a challenge for both companies, many say.

“Right now, [. . .] Amazon has a chance to be the hero,” leadership expert Eric McNulty told British business newspaper the Financial Times. “They could end up the villain if they wind up putting people in harm’s way.”

“Coupang will inevitably see a short-term decline in sales. How they respond will determine whether they’re able to calm this controversy,” predicted Seo Yeong-gu, a professor of business management at Sookmyung Women’s University.

By Shin Min-jung, staff reporter

Please direct comments or questions to [english@hani.co.kr]

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