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Tag: Coupang

  • SoftBank-backed Coupang raises $4.2 billion in US IPO

    SoftBank-backed Coupang raises $4.2 billion in US IPO

    Coupang LLC, South Korea’s largest e-commerce company, raised $4.2 billion in the biggest share offering in the United States this year after selling stocks in the IPO above its deal target range, people familiar with the matter said.

    The initial public offering price of $35 apiece, higher than the marketing range $32-$34 per share, gives Seoul-headquartered Coupang, which is backed by Japan’s SoftBank Group Corp, a market value of $60 billion.

    Coupang’s successful share offering comes as the U.S. IPO market is at its strongest in more than two decades and investors are flocking to buy shares in technology companies that have benefited during the COVID-19 pandemic.

    The IPO is the biggest in the United States this year, surpassing the $2.15 billion raised by dating app Bumble Inc. It also marks a jump in Coupang’s valuation, which was pegged at $9 billion in a fundraising round in 2018, according to Pitchbook.

    Analysts in South Korea said the strong response to Coupang’s offering was a result of its market-leader position in the country at a time when, like many other e-commerce firms, its sales have grown due to the COVID-19 pandemic.

    “Considering the high level of valuation inherent in the pricing, the market is giving a generous assessment of the company’s achieving the top spot in market share,” said Park Sang-joon, analyst at Kiwoom Securities.

    Coupang was the top-ranked South Korean e-commerce firm in 2020 with 19.2% market share, according to Euromonitor, compared to Naver Corp’s 13.6% and eBay Korea’s 12.8%. It was the 10th largest e-commerce firm in the world, based on retail value excluding sales tax.

    In 2020, Coupang’s net sales jumped 91% year-on-year to $11 billion. Net losses narrowed to $567.6 million from $770.2 million posted in the prior year.

    Founded in 2010 by Korean-American billionaire Bom Suk Kim, Coupang rose to prominence after launching its guaranteed same-day or next-day delivery service in the East Asian country. SoftBank’s $100 billion Vision Fund owns 35.1% of Coupang.

    Achieving a $60 billion valuation would add to good news for the Vision Fund, which is bouncing back from an annual loss in March. Last month, it announced record quarterly profit.

    The company’s shares will begin trading on the New York Stock Exchange on Thursday under the symbol “CPNG.”

    Goldman Sachs, Allen & Co, JPMorgan and Citigroup are the lead underwriters for the offering.

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  • SoftBank-backed Coupang reveals revenue surge ahead of US IPO

    SoftBank-backed Coupang reveals revenue surge ahead of US IPO

    South Korean e-commerce giant Coupang, backed by Japan’s SoftBank Group Corp, on Friday filed to go public on the New York Stock Exchange, hoping to cash in on strong demand for high-growth tech stocks as it reported a near-doubling of annual revenue and narrowing losses.

    Coupang is aiming for a valuation of around $50 billion in its U.S. initial public offering (IPO), according to a person familiar with the matter.

    This would make it the largest IPO in New York by a company based outside the United States since Alibaba Group Holding in 2014, Dealogic data showed.

    Founded in 2010 by Harvard graduate Bom Kim, Coupang made a splash in Korea with its ‘Rocket Delivery’ service, which promised delivery within 24 hours, shaking family-owned retail conglomerates such as Shinsegae and Lotte.

    Coupang was valued at $9 billion in its last private fundraising round in 2018, according to data provider PitchBook.

    In a regulatory filing, Coupang said total revenue jumped 91% in 2020 to $11.97 billion, while net losses narrowed to $474.9 million from $698.8 million.

    The company, viewed as a rival in South Korea to e-commerce giant Amazon.com Inc, received $1 billion in funding from SoftBank in 2015 and $2 billion from its Vision Fund in 2018.

    Coupang’s other investors include BlackRock Inc, the world’s largest asset manager, venture capital firm Sequoia Capital and billionaire investor Bill Ackman.

    The U.S. IPO market is at its strongest in more than two decades, and investors are flocking to buy shares in technology companies that have benefited during the COVID-19 pandemic.

    Coupang plans to list under the symbol “CPNG”. It has yet to provide a target asking price for its shares.

    Goldman Sachs, Allen & Co, JP Morgan, BofA Securities and Citigroup are among the underwriters.

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  • Uniqlo, Coupang, Daiso weigh cost as Japan boycott grows

    Uniqlo, Coupang, Daiso weigh cost as Japan boycott grows

    Casual-clothing chain Uniqlo says its sales have been affected as the consumer boycott of Japanese goods intensifies in South Korea.

    Uniqlo, owned by Fast Retailing, will close a downtown Seoul store soon, but says this is due to a decision not to renew a lease rather than the Japan boycott as reported by Japanese news media.

    Uniqlo has close to 190 stores in South Korea where it sells around US$1.3 billion of clothes annually, accounting for 6.6 percent of its revenue.

    Meanwhile, the boycott is leaving some South Korean companies that some consumers have labeled as “Japanese companies” struggling to explain themselves.

    South Korean consumers are boycotting Japanese products from beer to pens in protest over Japan’s decision to impose restrictions on exports of key high-tech materials to its Asian neighbor. While Japan cited security concerns for the curbs, the move also been seen as retaliation after a South Korean court last year ordered Japanese companies to compensate Koreans who were forced to work for Japanese occupiers during World War Two.

    Japan has also removed South Korea from a list of favored trading partners.

    “It is not easy to clear up the misunderstanding as there are some complicated cases of stake relationships that are confusing even to consumers,” wrote D M Park of Korea Bizwire.

    For example, Daiso, a flat-priced household goods company run by Asung Daiso, has been dogged by constant attacks from some consumers saying it is a “Japanese company” since the beginning of the boycott campaign.

    Daiso originally started in May 1997 when Park Jung-won, a former office worker, opened a household goods store called “Asco Even Plaza” in Seoul. In November 2001, the company changed its name to Daiso Asung in cooperation with Daechang Co, a Japanese distributor of flat-price goods. Daiso is the Japanese pronunciation of Daechang. It later registered as a foreign-invested company under the Foreign Investment Promotion Act in March 2002.

    Currently, Park holds 50.02 percent of Asung HMP, the largest shareholder, while Japan’s Daechang Industrial holds 34.21 percent of the shares.

    The problem is that Japanese companies own more than 30 percent of the shares, and Japan also has more than 2900 stores of the same mutual, uniform price household goods company run by Daechang Industrial.

    “There is no relationship between Japan’s Daiso, Japan’s payment of royalties, personnel exchanges, nor participation in management except for equity investments,” stressed a representative of Asung Daiso.

    “Samsung Electronics also has a high foreign stake, but that does not make Samsung a foreign company,” the representative said.

    Coupang, a leading e-commerce company, also suffered from rumors that it was a Japanese company after Japan’s Softbank Vision Fund (SVF) made equity investments.

    Although Coupang, an unlisted company, has never made its exact stake public, industry sources estimate that SVF’s stake in Coupang will exceed 30 percent.

    Coupang responded quickly through its own promotional channel as such rumors spread quickly in the early days of the boycott and showed signs of affecting sales as well.

    “Foreign ownership of KB Financial Group is close to 70 percent, while foreign ownership of Samsung and Naver is also close to 60 percent,” Coupang explained.

    Coupang then laid out the similar logic of Daiso that high foreign investment in shares does not mean that a company is a foreign company, hoping to overcome impact from the Japan boycott.

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  • Coupang, HP Korea sign MOU to strengthen sales

    Coupang, HP Korea sign MOU to strengthen sales

    E-commerce company Coupang said Thursday it signed a memorandum of understanding (MOU) with HP Korea Wednesday to strengthen sales channels for the technology company’s products. Through the agreement, Coupang will directly acquire HP products from the company, providing customers with better deals. HP Korea will also ensure faster delivery times and improve product services. The two companies plan to cooperate on online marketing and advertisements.

    James Lee, Coupang’s senior director, said, “By establishing long-term partnerships, [Coupang] will work harder to expand cooperative businesses.”

    Coupang currently offers a range of HP products, such as its gaming PCs and printers through its fast “rocket delivery” service.

  • Trends that coming in 2019 e-commerce

    Trends that coming in 2019 e-commerce

    Led by transformation in sales channels and customer demand, consumer trends for 2019 will center on subscription e-commerce, faster delivery, and eco-packaging, according to market experts. Subscription e-commerce, a field of business that involves curating products and delivering them on a regular basis, has been gaining popularity because it meets needs for tailored services, value, and convenience. From clean, neatly ironed business shirts to craft beers, you can get almost anything through a subscription service — now, even a car.

    Earlier this month, Hyundai Motor’s Genesis introduced a car subscription program that offers subscribers a choice of four Genesis vehicles for 1.49 million won (US$1,330) per month.

    “Our target group is drivers who want to experience a different variety of vehicle without having to worry about car management. The ultimate goal of our subscription program is to satisfy consumer needs amid shifting mobility trends,” Hyundai Motor said.

    According to industry data, subscriber-based businesses are undergoing an explosive expansion, having grown from 241 trillion won in 2000 to 470 trillion won in 2015, globally. Industry experts expect that number to surpass 594 trillion won by 2020.

    McKinsey & Company said in its “State of Fashion 2019” report that the subscription trend goes hand in hand with users’ desire for experiences, as they are more willing to spend money for a service that delivers tangible benefits along with personalized offerings.

    Meanwhile, over the past year, delivery has gotten faster for merchandise purchased via websites and apps. With services like Coupang’s Rocket Delivery, expecting one’s purchase to arrive the next day has become the new norm.

    Cutting down even further on delivery times will be a major sticking point for e-commerce businesses looking to stay afloat, market insiders said, with businesses now competing to ensure overnight deliveries, particularly of fresh food items.

    Overnight delivery is usually available only in Seoul and some parts of Gyeonggi Province and Incheon for now. Experts estimate that the market value of the industry will have reached 400 billion won this year.

    Lotte Mart currently plans to test-operate a 30-minute delivery service in the first quarter of the new year. Since September, it has offered a delivery service that moves products from its stores within three hours after purchase at an offline store.

    E-commerce company Coupang also plans to make a concerted effort to expand the overnight and even same-day delivery of fresh food products in 2019.

    “Our latest paid membership service, Rocket Wow club, which guarantees next-morning delivery for signed-up members, had already garnered almost 1 million members just two months after the service’s launch. We plan to expand the service to cover all customers across the country in the new year,” a Coupang representative said.

    The environmental packaging boom is set to continue well into 2019 as well. While plastic is not inherently bad, the way it is thrown away is problematic. As a result, an increasing number of consumers are rethinking their plastic use in an effort to cut waste.

    With environmental packaging campaigns spreading worldwide, manufacturers have been challenged to innovate their packaging methods.

    Since September, Starbucks Korea has replaced plastic straws with paper straws at some 100 of its stores in Seoul, Busan and Jeju, in an effort to reduce waste and protect the environment. All its paper straws are coated with soybean oil to make them more durable, the company said.

    The coffee franchise plans to eliminate single-use plastic straws from its 28,000 stores worldwide by 2020. Angel-in-us Coffee, the cafe chain operated by South Korean retail giant Lotte, also introduced special lids for cold drinks in an effort to reduce plastic use.

    “The throwaway culture is rapidly being challenged by increasing consumer awareness of the perils of plastic waste. A dramatic change in attitudes has occurred, forcing brands to rethink how they make better use of plastic in what they offer to consumers, who increasingly demand brands reduce, reuse and recycle plastic waste to better protect them and their world,” said Matthew Crabbe, a director of Trends APAC, in Global Consumer Trend report by Mintel.

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  • Coupang to become an authorized Apple retailer

    Coupang to become an authorized Apple retailer

    Coupang, Korea’s top e-commerce platform, has been selected as an authorized retailer to sell Apple products, the company announced Friday. It said that the e-commerce giant was selected to become an authorized reseller of Apple products, and the service will begin sometime this month. The products that will be offered include iPad Pros, MacBooks and Apple Watches, as well as related accessories.

    Coupang said that its shoppers can get access to Apple products that carry a full Apple warranty and come with after-sales customer services from Apple.

    “Coupang will be an attractive purchase channel for customers who love or want to experience Apple products,” said Navid Veiseh, Coupang’s senior vice president of global e-commerce. “We will continue to expand the range of premium electronics brands like Apple, which, when combined with our Rocket delivery and RocketPay services, make Coupang the first place for customers to turn when shopping for premium electronics.”

    Coupang is known for its fast Rocket delivery service that sends items purchased the following day.

  • Thai flagship store opened in Coupang

    Thai flagship store opened in Coupang

    South Korean e-commerce firm Coupang is planning to launch a flagship store in Thailand to boost the online sales of Thai-sourced products. Thailand’s Ministry of Commerce has been promoting Thai products on the platform since August, which has brought in more than THB118 million (US$3.57 million) for mostly food and beverage items. The ministry has just met with Coupang executives to seal an agreement to expand cooperation, resulting in the establishment of a Thai Mall on the platform.

    It is expected that the new partnership could result in an increase in sales to more than THB 200 million (US$6.06 million) over the coming year, a rise in export volumes to Korea by 7 per cent. Thailand’s total exports to South Korea were valued at $4.66 billion last year, an increase of 14.4 per cent from the year previous.

    Commerce Minister Sontirat Sontijirawong said “South Koreans know Thai brands from travelling here”, with 1.5 million of them visiting Thailand annually.

    Coupang is South Korea’s largest and fastest-growing e-commerce firm. It recently received an investment of US$2 billion from the SoftBank Vision Fund. It offers more than 120 million items for sale and 4 million available for guaranteed one-day delivery.

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  • Coupang Korea to sack $2 billion funding

    Coupang Korea to sack $2 billion funding

    South Korea’s Coupan, the fast-growing e-commerce firm, will receive an investment of US$2 billion from the SoftBank Vision Fund. The funding follows SoftBank Group’s initial investment of $1 billion in June 2015. The new round of capital will enable Coupang to continue investing in consumer-first technologies.

    Lydia Jett, partner at SoftBank Investment Advisers and a Coupang board member, said the company Coupang wants to have “a revolutionary technology platform and uncompromising focus on customer delight”.

    “We believe the company is well-positioned to lead the Korean e-commerce market, with significant platform opportunities ahead given its data, payments and logistics advantage.”

    With revenue more than doubling in the last two years and approaching $5 billion this year, Coupang is Korea’s largest online retailer with more than 120 million items for sale and 4 million available for guaranteed one-day delivery.

    Millions of customers buy from Coupang more than 50 times per year, and one in every two Koreans has downloaded Coupang’s mobile application.

    Coupang CEO Bom Kim said: “At Coupang, we are obsessed with making customers’ lives easier.

    We’re excited to continue our partnership with SoftBank. We are confident this investment will allow us to leverage the platforms we have created in logistics, payments, and data to make e-commerce and other innovations even more indispensable to our customers.”

  • Coupang launched Korea’s largest STEAM toy store

    Coupang launched Korea’s largest STEAM toy store

    Ecommerce platform Coupang has opened what it says is the largest Korean online toy store specialising in Steam (science, technology, engineering, arts and mathematics) education.

    The new theme store offers more than 390,000 Steam education items at low prices.

    Steam education refers to a creative teaching framework that integrates the five disciplines. It started as a Stem initiative in the US, and later arts was added to the mix. Unlike the traditional lessons, this latest education trend uses fun games to learn knowledge and senses that can be applied in a daily setting. The initiative encourages children to think comprehensively and flexibly, which contributes to their creativity.

    Coupang opens Koreaís largest STEAM toy store

    At Coupang, customers can find art supplies, blocks, remote control toys including drones, board games as well as instructive toys that can be used as tools to learn the five disciplines, grouped by age category as well as toy type.

    Flagship items include the Lego Boost 17101 unveiled at CES 2017 in Las Vegas. The toolbox offers hands-on experience of building a robot, cat or a car.

    Lee Byeong-hee, the head of baby category in Coupang, says the Steam initiative has been widely accepted as a new teaching method to nurture talents for future.

    “Customers can take advantage of the opening promotion and shop top educational toys from various brands at affordable prices.”

    Coupang is one of the world’s largest and fastest growing e-commerce platforms.

  • Coupang Opened a Hanbok Store that Provides Korean Traditional Costume

    Coupang Opened a Hanbok Store that Provides Korean Traditional Costume

    E-commerce platform Coupang has opened an online store specialising in hanbok, Korean traditional clothing.

    Even babies and pets are catered for with the hanbok range, which also includes hanbok accessories such as hairbands, daenggi (ribbons for braided hair) and ggotshin (women’s shoes with flower patterns).

    As well as its hanbok store, Coupang has specialty stores focusing on its private-label brand Tamsaa, organic/eco-friendly items, men’s grooming, maternity items and travel accessories.

    Ecommerce platform Coupang has opened a store specializing in Korean traditional clothing hanbok. (PRNewsfoto/Coupang)

    As well as Seoul, Coupang has offices in Beijing, Los Angeles, Seattle, Shanghai and Silicon Valley.

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  • Coupang opens Korea’s largest puzzle store

    Coupang opens Korea’s largest puzzle store

    E-commerce platform Coupang has opened what it claims is Korea’s largest toy store.

    While the store specialises in puzzles, it features a catalogue of some 95,000 toys including jigsaw puzzles, 3D puzzles, cast metal puzzles, cubes and fidget toys.

    Coupang launches Koreaís largest puzzle store on November 28 (PRNewsfoto/Coupang)

    Coupang already offers a broad range of products at affordable prices through its specialty stores, including organic foods, men’s grooming products, health supplements and children’s books.

    Coupang’s head of baby, Lee Byeong-hee said that puzzles have become a popular hobby for all ages.

    “We created the puzzle store to offer a range of products from Korean and overseas brands at low prices.”

    Key items on sales include Smart Study’s Pinkfong Puzzle Bag, Haksan Publishings One Piece Jigsaw Puzzle, palm-sized ALB Neo Cube Magnet Blocks and the CubicFun L174H 3D Neuschwanstein Castle with LED lights.

    Coupang marked the grand opening with special discounts of up to 30 per cent on some 10,000 Rocket Delivery puzzles.

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  • Korea Sale Festa’ kicks off with huge discounts from retailers

    Korea Sale Festa’ kicks off with huge discounts from retailers

    South Korea kicked off a nationwide shopping event on Thursday with a variety of promotions, cultural and entertainment events to draw more shoppers at home and abroad and revive the sluggish domestic consumption.

    The massive shopping campaign called “Korea Sale Festa” runs until Oct. 9, involving major retailers, manufacturers and traditional markets, while cultural and entertainment programs for foreign travelers will be held throughout October.

    The shopping festival is jointly hosted by the Ministry of Trade, Industry and Energy and the Ministry of Culture, Sports and Tourism to tie up the retail industry with tourism and cultural sectors to unleash pent-up demands in time with the major Chinese holiday season.

    A total of 249 retailers, manufacturers and online malls provide discounts and promotions at 59,000 stores across the nation, offering much wider options compared with last year’s fall shopping season when “Korea Black Friday” and “Korea Grand Sale” were held between September and October.

    This shopping season isn’t just limited to malls and online retailers. Consumers looking for a new vehicle, phone or television will find some attractive bargains at car dealerships and electronics stores as major companies join the shopping season. Among the big names are Samsung Electronics, LG Electronics, Hyundai Motor, AmorePacific and LG Household & Healthcare.

    samsung
    A sales manager at Samsung’s electronics store in Seoul explains discount deals on a refrigerator on Sept. 28, 2016, in this photo provided by the company.

    Three car makers — Hyundai Motor, SsangYong Motor and Renault Samsung Motors — offer up to a 10 percent discount on cars during the period, while Samsung Electronics and LG Electronics give half priced deals on best-selling home appliance items. Consumers can get up to a 670,000 won discount (US$612) on Samsung’s Galaxy S6 Edge Plus smartphone.

    Department stores give deep discounts on luxury goods, fashion items and cosmetics, knocking down price tags by up to 80 percent.

    Among the top price for a giveaway event is a 700 million won apartment offered by Lotte Department Store, the retail unit of Lotte Group.

    Online malls and social commerce sites, including Coupang and Ticket Monster, are also offering cyber deals during the period, with the government supporting part of their delivery fees to boost sales.

    About 400 traditional markets nationwide will hold various events and unique festivals in October to catch the eyes of visitors and spur the local economy.

    The event held ahead of the year-end holiday season is raising expectations among local retailers as it overlaps with a Chinese national holiday that runs from Oct. 1-7. It’s when deep-pocketed Chinese travelers hop on planes to go on a holiday shopping spree.

    According to industry officials, about 250,000 Chinese tourists are expected to visit South Korea during the weeklong autumn holiday.

    korea-sale-fiesta

    With so much money up for grabs, local retailers have prepared a bunch of promotional events and giveaways targeting Chinese patrons.

    Myeongdong, the busiest shopping street in downtown Seoul, has transformed to embrace Chinese travelers, supplementing Chinese-speaking shop assistants and putting up Mandarin signs for the latest beauty products.

    Duty free stores, which heavily rely on Chinese travelers, also offer promotional and entertainment events, teaming up with credit card companies.

    Shinsegae Duty Free holds “K-beauty and fashion week” during the Chinese holiday at its Myeongdong branch to attract those who are interested in beauty know-how and encourage purchase of Korean beauty products.

    Market watchers say the influx of Chinese tourists will give much-needed momentum to revitalize the tepid domestic consumption, which will in turn drive up shares related to consumption and leisure.

    “While last year’s sales event was mostly about offering discount deals, Korea Sale Festa is more systematic with wider discounts and cultural events for foreign travelers,” Nam Ok-jin, a researcher at Samsung Securities, said. “Special offers given during (China’s) National Day is expected to maximize the effect.”

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  • Coupang Sales Growth Bolsters SoftBank’s Bet on Korean Retailer

    Coupang Sales Growth Bolsters SoftBank’s Bet on Korean Retailer

    Coupang’s net sales more than doubled in the first half of the year, helping to validate SoftBank Group Corp.’s bet that the South Korean web retailer will carve out a piece of Asia’s booming e-commerce market.

    Net revenue rose to 868 billion won ($782 million) in the first half of the year, helped by retail expansion and increased margins, according to a financial document seen by Bloomberg. Gross merchandise volume climbed 26 percent to 1.8 trillion won in the period, the document showed.

    SoftBank, whose investment in Alibaba Group Holding Ltd. has zoomed past $70 billion, backed Coupang in June 2015 with $1 billion in financing that valued the Seoul-based company at $5 billion. The bets are part of billionaire Masayoshi Son’s quest to replicate his success with Alibaba, an investment that started with a $20 million stake more than 15 years ago. SoftBank’s expansion in Asia has also led to deals with India’s Snapdeal and Indonesia’s Tokopedia.

    The number of products offered by Coupang more than tripled to 700,000 items from a year ago, according to the document. The startup launched its Rocket Pay services and opened a fulfillment center in Korea, the first of two planned for this year, the document showed.

    Matthew Nicholson, a spokesman for SoftBank, declined to comment. Coupang Chief Executive Officer Bom Kim didn’t immediately reply to an e-mail seeking comment. Backers of Coupang include Sequoia, Greenoaks Capital and Rose Park Advisors.

    The startup, founded in 2010, is burning through cash to expand and capture users as it competes with sites such as Ticket Monster, a Korean online retailer that’s owned by Groupon Inc., KKR & Co. and Hong Kong-based Anchor Equity Partners. Forward Ventures, Coupang’s parent, said its operating loss widened to 547 billion won in 2015, compared with a 121.5 billion won loss in 2014.

    SoftBank’s e-commerce bet in India is under even more pressure. Snapdeal, which has struggled to narrow the lead of its home-grown rival Flipkart Ltd., now faces competition from Amazon.com Inc. In June, Amazon Chief Executive Officer Jeff Bezos pledged to invest another $3 billion in his company’s Indian operations, bringing the total to $5 billion.

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  • A $5 Billion South Korean Startup Is Beating Amazon At Its Own Game

    A $5 Billion South Korean Startup Is Beating Amazon At Its Own Game

     Jeff Bezos has no interest in bringing Amazon to the 51 million people in South Korea, and Bon Kim is the reason for that. Kim is the CEO of Coupang, the fastest growing e-commerce site of all time in South Korea. The startup, founded in 2010, grossed nearly $300 million in 2014 and is expected to show it quadrupled that amount in 2015, when those numbers are available. Last summer, Coupang raised $1.3 billion in funding. Kim has a 19% stake in the company, which gives him a net worth of $950 million.

    Kim and Coupang have mastered something Jeff Bezos and Amazon are still trying to figure out. Coupang offers on-demand e-commerce with same-day delivery. Amazon is trying to offer this to its bajillion customers, but so far, hasn’t been able to make the margins work. It is either too expensive for the consumer or for Amazon and often for both. Remember, Coupang was founded in 2010, the company has managed to do this in remarkably less time in business than Amazon.

    Bon Kim didn’t set out to become the e-commerce king of South Korea. He was born in Seoul and from the age of seven, he spent much of his life abroad. At 13, he went to boarding school in Massachusetts. He was a varsity athlete in track and wrestling. When it came time for college, Kim stayed local and went to Harvard, where he started a student magazine called the Current. Newsweek took the magazine over in 2001, a year after Kim graduated. He also interned at the New Republic.

    DENIS CHARLET/AFP/Getty Images

    Kim enrolled in Harvard Business School in 2010, but dropped out a year later. He had been bitten by the e-commerce bug and wanted to start a business in Seoul. At the time, Groupon was a hot commodity and Kim set his sights on the daily deal model. Coupang became the 30th Groupon clone in South Korea. Kim registered as a limited liability corporation in the U.S. to make it easier to raise money from American investors. He spent nearly a million on advertising. However, he soon learned that daily deals are a lousy business model. Customer retention is nearly nil.

    By the summer of 2013, Kim had transformed Coupang into an e-Bay style site while experimenting with true e-commerce. Two years later, Coupang had $400 million in capital from Silicon Valley behemoths Sequoia Capital and BlackRock and had made a big commitment to its own inventory. Kim made a more than billion dollar investment in logistics infrastructure.

    Remember, Kim spent many years in the U.S. and Coupang’s structure reflects that. The company’s head of marketing is a former Zappos employee whom Kim convinced to move to Seoul with his family last year. Kim wanted Coupang to have a Western perspective to e-commerce. Coupang has more than 200 non-Koreans on its staff, including former Amazon executives, consultants, and engineers fresh from Silicon Valley. Kim hired a battalion of translators to act as translators for its American employees and as mediators for its Korean employees.

    In just the past two years, Coupang has built a network of customized delivery truck, warehouses controlled by an algorithm that allows it to be the fastest delivery in Korea. The company’s algorithms allow it to inform employees on which stock to move where, so that the most frequently purchased items are closest to the people buying them. Deliveries are made by 3,600 “Coupangmen,” who hand out balloons and candy to kids and text customers pictures of their boxes when delivered, if they are not home to receive them. The average Coupang driver delivers 120 packages each during a 10-hour shift. In South Korea, other retail establishments take two to three days to deliver their goods. Coupang is blowing the competition completely out of the water by delivering in a day or less. Customers can even cancel a shipment already on its way. Oh, and by the way, they don’t charge for delivery.

    South Korea has the second largest GDP in Asia. Almost everyone is on a smartphone and a high-speed network. Half of the country’s population lives in and around Seoul, making it easier for Coupang to deliver on their impressive promise of same day delivery. In South Korea, 15 cents of every retail dollar is spent online. In the U.S. that figure is nine cents.

    Bon Kim has become the e-commerce king of Korea and beaten Jeff Bezos at his own game. Amazon currently operates in 13 countries. Alibaba dominates China and Rakuten is the leader in Japan. Kim is content to keep his business running in Korea alone. At least for now.

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  • Coupang Faces off against Retail Giant Shinsegae

    Coupang Faces off against Retail Giant Shinsegae

    “We should catch up to Coupang, accepting the risk of financial loss,” said Chung Yong-Jin, vice chairman of Shinsegae Group. “Coupang is taking away our customers in their 20s and 30s. Why are we just sitting on our hands and leisurely watching the exodus?”

    The JoongAng-Ilbo has recently reported that vice chairman Chung Yong-Jin of Shinsegae Group had harshly criticized Shinsegae executives for making a lukewarm response to Coupang eating into its customer base.

    Chung was quoted as saying: “Even if we have to incur a deficit, the entire distribution channel should come up with strategic online product offerings and sell them at rock bottom prices to lure in 20-30 something consumers who use smartphones to make purchases. To that end, we should give priority to taking E-mart’s online mall to new heights.”

    He made such a comment because E-mart, the discount store unit of Shinsegae, has lost business to social commerce operators, especially Coupang, over the past year.

    After all, Shinsegae Group waged a price war against e-commerce leader Coupang last month: it announced that it would sell baby formula, feminine hygiene products and instant coffee at the lowest possible prices. E-mart, the country’s largest discount store chain logging 13 trillion won in sales and 500 billion won in operating profit, started to fight back, accepting the risk of incurring a deficit.

    Coupang, established in 2010, has emerged as a threat to Shinsegae Group, the country’s largest retail juggernaut. Coupang’s sales grew sharply from 348.5 billion won in 2014 to 1.5 trillion won in 2015, greatly unnerving Shinsegae Group. If the growth of Coupang continued at such high speeds, Shinsegae Group fears, it could be overtaken by Coupang in 2-3 years.

    Computer-based and mobile traffic to E-mart’s online mall is languishing in the one million visitor range. Sales from its online mall account for about 5 percent (or 700 billion won) of its total sales (13 trillion won). In contrast, the number of visitors to Coupang reached over 7 million, dwarfing traffic to E-mart’s online mall.

    Coupang’s mobile app came out on top in traffic for 41 consecutive months from July 2012 to November 2015.

    Though E-mart with deep pockets is trying to take sales away from Coupang by offering products at sharply discounted prices, the majority view is that Coupang still gets the upper hand on E-mart when it comes to mobile shopping. A Coupang official said: “We are unscathed by E-mart going on the offensive. Actually, things are looking up as the mobile shopping market is on the upswing. It has become obvious that so many consumers have faith in Coupang.”

    According to Coupang, consumers, who have enjoyed convenient mobile shopping experiences since the launch of Coupang, will not easily drift away from Coupang.

    There is no doubt that Coupang is enjoying a “first-mover” advantage as sales from its mobile shopping platform surpassed 80 percent of its total sales. According to Statistics Korea, mobile shopping sales hit 2.66 trillion won in January 2016, exceeding computer-based e-commerce sales (2.54 trillion won) for the first time.

    Coupang is expanding its business realm on the back of its signature “Rocket Delivery” program, its delivery staff dubbed “Coupang men,” and its ‘direct commerce’ business model, in which Coupang takes care of all the stages of e-commerce from selling to delivery.

    Coupang plans to invest 1.5 trillion to increase the number of Coupang men to 15,000 and the number of logistics centers from 14 to 21 by 2017.

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