A Coupang Eats delivery driver delivers food ordered online by bicycle in Seoul on Jan. 29, 2021. Korea Times file

By Kim Jae-heun

Coupang, Korea's largest e-commerce company, has denied a recent media report that it was looking to sell its food delivery platform amid intensifying competition and market saturation, company officials said Monday.

"The ongoing rumor that we are going to sell our business is not true. Also, we cannot comment on any issues related to M&A deals," a Coupang official said, dismissing the sale of Coupang Eats as a groundless rumor.

About its delivery driver shortage and the deterioration of its delivery services, the official said Coupang Eats is looking for a business partner to secure a sufficient number of full-time workers.

Citing an unnamed industry official, a local newspaper said that ever since April when the government lifted COVID-19 social distancing measures that limited private gathering sizes and multi-facility operating hours, Coupang Eats has been losing customers as more people started returning to restaurants to dine in person. It also failed to beat Baedal Minjok (Baemin) in single-order delivery services, which has hobbled its efforts to expand its market share.

According to the data analysis service for apps, Mobile Index, Coupang Eats' monthly active users (MAU) decreased to 4.34 million last month, losing nearly 2.7 million from a peak of 7.02 million last December.

Meanwhile, Baemin's MAU increased some 780,000 from 20.74 million to 21.52 million in the same period. This situation led Coupang Eats to reduce its promotional benefits for delivery drivers, resulting in a decrease in the quality of the company's delivery services. In the second quarter of this year, the company's sales decreased 7 percent year-on-year.

"Coupang Eats does not want to invest more in the domestic food delivery market, which is already a red ocean. The company has reportedly contacted local retail giants such as Lotte, Shinsegae and GS Retail to sell its business to them. I think the company knows it cannot show any more consecutive losses in its game of chicken against Baemin," a local food delivery firm official said.

Naver's attempt to jump into the food delivery market is threatening Coupang Eats too. The IT giant revealed its plan recently to launch its N Delivery service in the second half of this year.