Bum-seok Kim, CEO of Coupang
“We will make Coupang’s customers enjoy everything.” This is his’vision’ that Coupang founder Kim Bum-seok (chairman of the board of directors) officially announced the direct listing of the New York Stock Exchange. To a question that many doubted,’What will Coupang make money with’, he came up with a simple but heavy answer. ‘All the goods that exist in the world (to service in the future?)’ using the state-of-the-art logistics system, the fastest, and furthermore, to deliver the customer’s desired time to the customer’s desired time. It is an exit table.
Breaking the initial expectation that it would be listed on the NASDAQ, Coupang chose to enter the New York Stock Exchange. After a long preparation, it crossed the tricky gateway of the Securities and Exchange Commission (SEC). Although the public offering price has not been decided yet, leading US media such as The Wall Street Journal and CNBC are expecting more than $50 billion worth of recognition. Considering the fact that Softbank’s Vision Fund estimated about $30 billion in an interview with Bloomberg about two years ago assuming a NASDAQ listing, we can gauge the interest of US investors in Coupang.
There has been a lot of controversy about Coupang’s potential. The key is the question,’Can you make money?’ Coupang continued to grow every year immediately after its establishment in 2010. Sales in 2019 amounted to 7.2 trillion won. This is a 64% increase from the previous year. It is reported that sales grew more than 40% last year. Despite the growth in appearance, Coupang has been using the stigma of’every year deficit. In response, key Coupang officials confronted it with a “planned deficit.”
Despite the controversy over the deficit, experts say that the reason that Chairman Kim Bum-suk made the direct listing in New York a reality is that Coupang has been recognized for its potential as an e-commerce company that combines with the state-of-the-art logistics that Coupang has built up in Korea over the past decade. Chairman Kim said, “Coupang has been running without a single step in building our own network that combines technology and logistics, the first bold decision we have made since its founding.” “I will run constantly to create a world that everyone will be curious about.”
Coupang’s new secret weapon, revealed by Chairman Kim, is’delivery that day’. Chairman Kim explained: “Let’s say a student orders something he needs on a Monday. It’s going to arrive on Tuesday morning with the current early morning delivery. The problem is that the student might be going to school on a Tuesday morning. Then, on Wednesday or later, the student will arrive. “I thought I couldn’t do this.” Coupang’s strategy is to speed up delivery so that the items you need on the day can be delivered that day.
Chairman Kim clarified that the realization of ESG (environmental, social value, and governance) is another vision of Coupang. Chairman Kim said, “We devoted ourselves to the development of technology so that our customers can make online purchases in Coupang without the guilt of harming the environment, and we have found a solution.” “We have improved our logistics system to eliminate the need for paper box packing in more than 75% of the processes,” he explained.
Along with this, Coupang announced that it will actively utilize the eco-back. Chairman Kim said, “When the Coupang vehicle leaves the distribution center, it will be loaded with goods to be delivered to the customer, and when returning, we will collect the eco bag and make it come.”
In the meantime, when it comes to Coupang’s business model, many experts have speculated that Coupang will follow the Amazon method. Starting with online book sales and entering the retail industry, Amazon built its own platform. Based on this, it has advanced into various areas such as cloud service (AWS), advertisement, and OTT. AWS is considered to be the best player that turned Amazon into a surplus.
From this perspective, it is predicted that Coupang will put various services on e-commerce platforms like Amazon. Last year, it introduced OTT service. Recently, it is expected to enter the used car trading market under the brand’Kureung’. In response, an official from Coupang dismissed it as “a story that is far from the essence of the business that Coupang pursues.
As Coupang announced that it would invest more than 50 trillion won in logistics expansion, existing logistics operators such as CJ Logistics are evaluated to have met the strongest competitors since its inception. Coupang has been licensed for third-party logistics.
Reporter Park Donghui [email protected]