Special Feature
Part of a ZDNet Special Feature: Coronavirus: Business and technology in a pandemic

Softbank-backed Coupang becomes central to new South Korean COVID-19 outbreak

Over 100 new cases have been linked to Coupang facilities.

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E-commerce giant Coupang is under investigation following a rash of new COVID-19 cases in South Korea linked to the firm's facilities. 

The company, backed by Japanese conglomerate Softbank, is now facing scrutiny concerning whether or not a warehouse facility and logistics center close to Seoul was following coronavirus-preventative guidelines, as reported by Reuters.

Based in Seoul, Coupang received a $2 billion cash injection from Softbank in 2018. While Softbank is facing severe financial difficulties and intends to offload some assets to shore up its operating cash flows, the company has insisted that investment in Coupang will continue. 

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Now facing high levels of demand for online orders due to COVID-19, Coupang has been busy, and the warehouse near Seoul has now become a new hotspot for infection. According to the publication, thousands of temporary staff were hired to cope with high consumer demand, but these large numbers may have had social distancing difficult. Investigating health authorities have also suggested that some employees did not wear masks and protective equipment was not properly cleaned or disposed of. 

South Korea's rapid action to contain the novel coronavirus has been held up as a success story, but in less than a week, over 100 confirmed cases have been linked to the facility. 

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Coupang said that "utmost efforts" have been made to "protect the safety of customers and employees."

The facility's operations have been suspended for two weeks. A second cluster has also been narrowed down to a life insurance company in the area, but it is not known if there is a connection.

Government officials have said that returning to previously-imposed social restrictions is a possibility if clusters continue to emerge. 

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Earlier this month, Softbank reported an operating loss of ¥1.36 trillion for the fiscal year ended March 31. Despite sales increases, the company has suffered mainly due to the SoftBank Vision Fund, an investment arm that has been hit hard by the coronavirus pandemic and tumultuous investments in WeWork, Uber, and Grab.

SoftBank founder and CEO Masayoshi Son said earlier this year that up to 15 companies under the wings of the Vision Fund could end up going bankrupt.

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