COUPANG | Korean Alibaba, Netflix, DoorDash, UPS, Amazon | eCommerce Giant

COUPANG | Korean Alibaba, Netflix, DoorDash, UPS, Amazon | eCommerce Giant

Company Profile
Coupang is a South Korean eCommerce company. No, that would be an understatement. It is actually :

Amazon + UPS + DoorDash + Netflix.

The company’s name is a mix of the English word “coupon” and “pang,” the Korean sound for hitting the jackpot.

The company was founded by Harvard Business School dropout Bom Kim in 2010. It started off as a Groupon clone in Korea but they soon pivoted and became an online platform for 3rd party sellers. After the pivot it took them 3 years to hit $1B in sales a year.

It operates only in South Korea where it dominates the market. 70% of the South Korean population lives within the 7 miles of its logistics centres.

Coupang had 14.8 million active customers at the end of 2020.

Coupang does “next-day” delivery, “same-day” delivery and “dawn” delivery of groceries and millions of other items at no extra charge. The company delivers 99.4% of orders within 24 hours. Customers leave reusable containers outside their doors, so 75% of the packages are delivered without an additional cardboard boxes. They use eco bags instead of traditional packaging. Customers can place their orders at midnight and get their orders delivered by 7am. Customers who belong to its membership program, Rocket Wow, can return a Coupang product by leaving it outside their door, without a box or return label and notifying Coupang via mobile app.

It has more than 100 fulfilment and logistics centres in over 30 cities. It employs 15,000 full-time drivers in South Korea for its deliveries. They call them “Coupang Man”, recently renamed as “Coupang Friends”. They wear bright uniforms and cruise around in branded, company-issued vehicles.

The company also branched out into other services such as food and grocery deliveries, video streaming, payment processing and digital advertising. These new business segments have largely been successful, but altogether they accounted for less than 10% of total revenue in 2020.

Going Public (IPO)
Let’s have a look at the pre-IPO numbers :
South Korea’s e-commerce market has an estimated value of $90.1 billion in 2020 with an annual growth rate of 22.3%, according to data analytics firm GlobalData. That is expected to grow at a compounded annual rate of 12% to reach $141.8 billion in 2024.

Coupang turned down lots of takeover attempts. Its biggest backer is SoftBank. Coupang received $1B in 2015 and another $2B in 2018 from SoftBank valuing the company at $9B.

Billionaire investors Stanley Druckenmiller, Bill Ackman and a former Federal Reserve governor Kevin Warsh were early backers of Coupang. Kevin Warsh joined the board of Coupang in 2019. Warsh owns a total 280,662 shares of Coupang, according to a filing with the SEC. Bill Ackman personally invested in Coupang in 2014.

Coupang issued 130 million shares, $35/share, valuing the company at $60 Billion and was planning to raise $4.2 Billion. By the end of the first day of trading company valuation went up to $90Billion. It is the largest IPO in the US in year 2021 so far.

Company generated $12B in annual sales, which is 91% increase in year-to-year sales. Net loss was $699M in 2019. The company managed to narrow it down to $475M in 2020. Coupang’s market share in Korea rose from 18.1% in 2019 to about 24.6% last year due to the coronavirus pandemic.
Reference :

CNBC Television : https://www.youtube.com/watch?v=TRAKBSZB0PY
CNBC TV : https://www.youtube.com/watch?v=q7HM1iSRAJ8
Bloomberg : https://www.youtube.com/watch?v=ZgmQhXqrVpg
CrunchBase : https://www.crunchbase.com/organization/coupang
Coupang Form S-1 : https://bit.ly/3ewyIPR
Protocol Article : https://bit.ly/3tj1J5L
New York Times Article : https://nyti.ms/2ONANfq
Billionaires invest in Coupang : https://cnb.cx/3rTA3Eh
Coupang Newsroom : https://www.youtube.com/watch?v=-rvLVPMdSKc

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