Thankfully, that's where Amazon comes in. Unless you live in a major city like New York or L.A., you probably don't have access to a Koreatown or Asian-focused beauty stores (and the K-beauty selections at stores like Sephora and CVS are admittedly scant). This led Alibaba to embrace initiatives like digital payments early on, and why Coupang went to solve consumer logistics.Despite Korean beauty's mainstream status in the Western beauty market, many of the country's best exports can still be difficult to come by. “ The road to solving for the consumer experience in China was different than the road for solving it in Korea, where the biggest friction points for consumers are different. “That shows mainly in the operating margins at the time, where it was 31% for Alibaba versus -4% for Coupang (Coupang was still operating cash flow positive from in 2020 with $302 million).”Ī major commonality is that both companies became pioneers by focusing on making it easier to buy from their platforms in their respective markets, he added.
But there are also several noteworthy differences between the two companies including “ the amount of capital intensity between the two at the time of the IPO, where Alibaba had a capital-light model that didn’t require having a lot of infrastructure investment at the time,” Kim said. “This allows Coupang to innovate on delivery in a way the world has never seen before.”Ĭoupang’s IPO is drawing comparisons to Alibaba’s debut on the New York Stock Exchange in 2014, since both are Asian e-commerce giants. You have 50 million+ people in the landmass the size of the state of Indiana, but when you look specifically at just inhabitable land, it’s really the size of Rhode Island, about 2,700 square kilometers,” Kim said.
“ Coupang’s model is very unique because of the density of South Korea. In addition, its logistics infrastructure benefits from the country’s geography. “ Both leverage Coupang’s vast logistics network and Coupang has the largest directly employed delivery fleet in South Korea with over 15,000 directly employed drivers.”įormer Uber CTO Thuan Pham joins South Korean e-commerce leader CoupangĬoupang was also able to grow quickly thanks to South Korea’s very high internet penetration rate of 96% and relatively high gross domestic product per capita.
These are Rocket Fresh, its fresh grocery delivery business, and Coupang Eats, similar to Uber Eats. “The moats from scale are quite strong in a market like South Korea because you’ve done something right to win over the South Korean consumer,” he added.ĭespite its high market penetration already, Kim said Coupang still has two main areas of growth. We’ve seen this with Kakao, Naver and now Coupang.” Even with the necessary resourcing, you’ll notice that in South Korea, similar to other developed geographies, market leaders tend to build on their leads over time. In order to catch up, Kim told TechCrunch in an email that “a competitor would need to figure out a way to invest billions into logistical and technical infrastructure to try to compete with Coupang. In 2020, it increased its market share to 24.6%, up from 18.1% in 2019.Ĭoupang consumer research by Goodwater Capital. Neither he nor Goodwater have holdings in Coupang, however, and are releasing the teardown as third-party research.Īccording to the report, Coupang is not only the current market leader in South Korea, but also “the only player making major market share gains, widening its lead over competitors” like G Market, 11 Street, Auction, WeMakePrice, Naver Shopping and TMON. Before launching Goodwater, co-founder Eric Kim was managing director at Maverick, an early investor in Coupang and served on the company’s board from 2011 to 2017. Goodwater’s S-1 teardown of Coupang, released today, is based on a combination of proprietary consumer research and information from Coupang’s S-1 filing. Founded in 2010, Coupang is sometimes described as the Amazon of South Korea, but for years it has managed the impressive feat of achieving an even higher dollar retention rate than Amazon, according to a report by Goodwater Capital. The company disclosed earlier this month that it is seeking up to $3.6 billion at a potential $51 billion valuation on the New York Stock Exchange. Korean e-commerce giant Coupang is expected to hold one of the biggest tech IPOs of the year on March 11.