Coupang, Korea's largest e-commerce operator, is moving to replace plastic packaging with paper bags for its delivery services, aligning with the government's anti-plastic policy direction. The strategic shift is seen as a preemptive response to the government's excessive packaging regulations while also addressing cost pressures and supply instability caused by soaring naphtha prices—a key raw material for plastic—amid the prolonged Middle East conflict.
Coupang's move is expected to significantly influence other major e-commerce players in Korea. The domestic paper industry, which supplies paper bags and corrugated boxes, is anticipated to benefit from the packaging transition in the retail market.
According to paper and e-commerce industry sources on January 10, Coupang is developing a new type of paper bag to replace plastic packaging used in services such as dawn delivery. The goal is to gradually adopt the paper bag packaging for dawn delivery and reduce plastic packaging usage.
Previously, Coupang delivered 85% of its total shipments using reusable containers or plastic packaging to reduce paper consumption. While paper usage decreased, this approach resulted in the unintended consequence of consuming massive amounts of plastic. Coupang is estimated to have consumed approximately 7,000 tons of plastic annually for producing plastic packaging materials.
Coupang's shift from plastic to paper bags is a preemptive response to the amended Resource Recycling Promotion Act, which takes full effect on April 30. Under the subordinate regulations of the amendment, packaging space ratio for parcels shipped to consumers will be limited to 50% or less. Violations will incur penalties of up to 3 million won ($2,100) per case. In simple terms, the regulation prohibits packaging where air exceeds the actual contents—similar to nitrogen-filled snack bags—aiming to curb the increase in delivery waste from excessive packaging.
The government added incentives in additional notices to encourage the transition from plastic to paper packaging. If companies switch to paper bags or use paper cushioning materials inside packages, the packaging space ratio limit is relaxed to 70%. The intention is to naturally drive the shift toward eco-friendly packaging systems by easing regulations for those using environmentally friendly materials like paper. For Coupang, which frequently delivers small household items, securing additional packaging space is particularly important.
As Coupang, the leader in Korea's e-commerce market, pursues the paper packaging transition, platforms including Naver Shopping (035420.KS), 11Street, Gmarket, and Musinsa are expected to join the plastic-free movement, intensifying eco-friendly delivery competition. Coupang's packaging system change could serve as a signal for transforming industry-wide standards beyond a single company's response. An e-commerce industry official said, "We are closely reviewing the industry impact of the law's implementation and Coupang's moves."
This packaging transition is expected to be a major boon for the domestic paper and corrugated box industries that produce paper bags, corrugated boxes, and base paper for cushioning materials. Kraft paper is primarily used for delivery paper bags, with Jeonju Paper and Paper Korea (001020.KS) being representative base paper manufacturers. For corrugated boxes, major companies include Taelim Paper (base paper), Taelim Packaging (011280.KS) (processed products), Shindaeyang Paper (016590.KS) (base paper), and Daeyoung Packaging (014160.KS) (processed products). Furthermore, paper companies are expected to strengthen activities such as joint research and development of eco-friendly paper packaging materials in collaboration with the government and e-commerce companies.
A paper industry official said, "The implementation of the amended Resource Recycling Act is expected to accelerate the movement across the e-commerce industry to expand the use of eco-friendly packaging materials such as paper," adding, "We will continue efforts to develop high-quality eco-friendly packaging materials through technological development."
