South Korea's prominent e-commerce platform, Coupang, is making a significant stride into the realms of luxury beauty and fashion. With a strategic move to diversify its product offerings from mid-range to high-end, Coupang aims to boost its profitability and solidify its dominance in the online shopping arena.

Expanding Vertically with R.LUX

In October 2024, Coupang launched R.LUX, a dedicated luxury beauty platform, as part of its broader expansion strategy. This move includes platforms like Farfetch for global luxury goods, C. Avenue for premium fashion, and C. Street for streetwear. By entering the luxury cosmetics market, Coupang is competing fiercely with platforms like Olive Young's Luxe Edit and Kurly's Beauty Kurly. Industry sources suggest that by the end of 2024, high-end brands such as Jo Malone and Lancôme are expected to join R.LUX, adding to its existing portfolio of 23 brands including Estée Lauder, Sulwhasoo, and Hera. This expansion is set to increase the number of brands on the platform to 30 by the year-end and potentially reach 50 to 70 by 2025, on par with major department stores like Lotte, Shinsegae, and Hyundai. 1: Consumers previously had to rely on international shipping to purchase luxury products on Coupang, which often took about a week. However, with official partnerships, these brands are now available via Coupang's Rocket Delivery, ensuring next-day shipping without the delays associated with customs. This enhanced delivery service is likely to attract more customers and drive sales. 2: Despite Coupang's dominance in general consumer goods, the luxury beauty market has been dominated by department stores and offline powerhouses like Olive Young. Coupang's foray into this space showcases its confidence in the growth potential of the sector and the absence of a clear market leader. While Olive Young has a stronghold in offline beauty sales, it has yet to establish a similar dominance in luxury beauty. The willingness of luxury brands, which have been traditionally hesitant to join online platforms, to expand their digital presence further highlights the opportunity at hand.

Premium Fashion Platforms

Coupang's premium fashion platform, C. Avenue, features over 100 department-store brands like Lacoste, Hazzys, and Couronne. This provides a wide range of options for fashion-conscious consumers. Meanwhile, C. Street caters to younger consumers with popular social media-driven fashion brands. Coupang is also integrating global luxury fashion into its portfolio through Farfetch, which it acquired in 2023 for 650 billion won ($459 million). Despite undergoing restructuring to minimize losses, Farfetch continues to offer high-end brands such as Louis Vuitton, Dior, and Versace. 1: The combination of Coupang's fast delivery capabilities and its expansion into luxury goods has the potential to revolutionize the online market. For both Coupang and other e-commerce players, "luxury beauty" represents a vast untapped potential, especially as they strive to cater to consumers in their 20s and 30s as well as those in their 30s to 50s with higher purchasing power. 2: Coupang's aggressive strategy positions it as a formidable competitor to department stores and other premium platforms. By offering a diverse range of luxury products and services, Coupang is able to attract a wider customer base and create a virtuous cycle of consumer engagement and platform growth.