Coupang’s Loyalty Program Drives Engagement as Company Expands Services

For Coupang founder and CEO Bom Kim, a key customer engagement tool for the multinational eCommerce company is its WOW subscription membership program, which had 14 million members at the end of 2023.

For less than $4 per month, the program offers customers a range of benefits including unconditional free shipping, free returns on Rocket Delivery, and exclusive access to services like Rocket Fresh for fast grocery delivery.

“One driver of the expanding cohort spend is the compounding value of our WOW membership savings program,” Kim explained to analysts Tuesday (Nov. 5) during the company’s third-quarter earnings call.

“Our WOW members increasingly see the value of WOW and the many benefits they receive on Coupang, including access to free shipping, free dawn and same-day delivery, free returns, free content on Play, free Eats delivery, and free Rocket Fresh deliveries. We see the higher levels of engagement reflected in the order frequency of our WOW members, which is nine times that of our non-WOW customers. And our most mature WOW members spend on average over 2½ times that of our newest WOW members.”

According to the PYMNTS Intelligence report, “The Impact of Subscription Models on Consumer Choice,” created in collaboration with sticky.io, retail subscribers are twice as likely to sign up for a program based on enjoyment over cost, with 30% of consumers ranking enjoyment as the top reason to subscribe, compared to 18% who cite cost.

During the third quarter, Coupang’s net revenue rose 27%, to $7.9 billion. The company saw continued expansion in its Product Commerce segment, which generated $6.9 billion in revenue, up 16% year over year, driven by an 11% increase in active customers, reaching 22.5 million.

Coupang’s Developing Offerings segment, which includes services like Coupang Eats, Play and Farfetch, recorded a year-over-year revenue increase of 347%, driven by a combination of international expansion and the success of new services like food delivery and streaming.

“Our nascent offerings like Eats, Taiwan, Play, and Farfetch, continue to march forward on the positive trajectory that we’ve seen throughout the year,” Kim added. “It’s important to note that with each of these offerings we’re still in the very early stages of the journey. And with each step we become even more encouraged by their potential to create meaningful moments of WOW for customers and deliver attractive returns.”

Additionally, Coupang launched a new luxury offering called R.LUX, a new service designed to offer luxury skincare and cosmetic products with same-day or next-day delivery via Rocket Delivery. Unlike its existing Rocket Luxury service, which has been selling luxury beauty items since last year, R.LUX focuses on directly purchased products from beauty companies and provides a dedicated app for an upscale, offline store-like experience. Customers can access R.LUX through their existing Coupang accounts, with orders delivered in special packaging and backed by a dedicated customer service center.

“We launched R.LUX, which gives customers access to some of the most in-demand luxury beauty brands,” Kim added. “We’ve partnered directly with luxury brands to provide a new kind of white-glove service: customers interact with the most exclusive brands in R.LUX’s rich and sophisticated shopping environment and receive products via Rocket’s next or same day delivery in elevated packaging custom designed exclusively for R.LUX. It’s just another example of the latest selection and service we’ve added to our customers’ delight, and there’s much more to come.”