COUPANG’S OFFICES in Seoul afford a view of the South Korean e-merchant’s promise. Each daybreak the forest of high-rise house blocks teems with its vans dropping off orders made the evening earlier than. This self-styled “rocket supply”, and Koreans’ love of it, fuelled Coupang’s stratospheric rise. When it debuted on the New York Inventory Trade in March 2021, its shares almost doubled in worth immediately. It closed its first buying and selling day with a market capitalisation of $80bn. It was the most important non-American preliminary public providing (IPO) since Alibaba, a Chinese language e-commerce behemoth which listed in 2014.
Issues have gone downhill from there. Coupang’s share value is round three-quarters beneath its peak. In March SoftBank, a Japanese tech-investor and Coupang’s largest shareholder, offloaded 50m shares for $1bn, having offered a tranche of the identical dimension for $1.7bn six months earlier. The agency has been caught up in a broader sell-off in risky tech shares, particularly in unproven corporations. The rise of e-commerce could also be easing off because the pandemic gross sales increase fizzles, simply as rates of interest rise to include inflation. This has harm the world’s Amazon wannabes (see chart) and made traders much less tolerant of heavy losses within the pursuit of development—$1.5bn final yr in Coupang’s case.
The agency stays assured. On Could eleventh it reported buoyant first-quarter outcomes. Gross sales rose by 22% yr on yr, to $5.1bn. Though it booked one other web loss, its core enterprise really turned worthwhile on an adjusted foundation, sooner than anticipated. Its shares seemed set to begin buying and selling a fifth larger the following day, after The Economist went to press.
Almost half its web loss final yr was defined by reinvestment, particularly in its infrastructure. Some 70% of South Koreans now dwell inside 10km of one among its warehouses. E-commerce rivals akin to Naver and eBay Korea lack its footprint. Conventional retailers with established logistics networks are much less technologically refined. Its workforce is made up of workers moderately than gig staff, making it much less liable to a regulatory backlash. As for SoftBank’s divestment, it might have had extra to do with the Japanese group making an attempt to lock in income as its different dangerous tech investments bitter than with considerations about Coupang, thinks Park Eun-kyung of Samsung Securities, a dealer.
To shore up its dominance, Coupang is moving into meals and grocery supply, video-streaming and fintech, with a “buy-now-pay-later” scheme to enhance its personal e-payment system. That has helped it draw extra individuals into its empire. Within the first quarter the variety of energetic prospects grew by 13% yr on yr, to 18m, having risen by double digits in earlier quarters. Final yr it launched in Japan and Taiwan. Like South Korea, these international locations have excessive smartphone penetration, ingrained online-shopping habits and dense cities—in different phrases, Coupang’s rocket gas. ■
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