Correspondent Column The Importance of Global Standards

During last year’s Black Friday period, I ordered several products online. Macy’s Department Stores, etc., announced that it may take several weeks for delivery due to a burst of orders amid the Corona 19 crisis. Some products have been received within a month of actually placing an order.

Amazon, an online store, also placed orders at the same time. The fastest thing was in one day, and at the latest, it did not exceed 3-4 days. This is one of the decisive factors behind Amazon’s 47% share (as of the end of last year) in the U.S. e-commerce market.

Amazon has introduced a large number of artificial intelligence (AI) technologies and automated robots (Kiba) to improve delivery efficiency. Only 45,000 robots are working. Around 110 large full-filment centers were built near the city. It is a place that selects and packs the products of the company and stores and handles inventory management in a batch. Amazon, which hired 800,000 people in 2019, hired more than 500,000 people in a year. In terms of taxes and jobs, it is considered to be the largest beneficiary company in the United States.

Coupang chooses US instead of Korea

Coupang, the first Korean company to list directly on the New York Stock Exchange on the 11th, benchmarked Amazon, but received attention as a service that is one step ahead of Amazon. The distinguishing points are early morning delivery and return service in front of the house.

If you place your order only by 12 p.m., you can pick up the product at home before 7 a.m. the next day. The fact that you can return or refund at home with a few pushes of a button is a service that even Amazon cannot cover. Coupang’s market share in Korea is only 13%, but its market capitalization reached 83.1 billion dollars (as of the 12th) thanks to this innovation.

Coupang’s fruitful achievements were achieved by overcoming the’special Korean situation’, which attracts more attention. The company’Rocket Delivery’ was plagued with controversy that it was “unlicensed logistics business that did not obtain permission from the Ministry of Land, Infrastructure and Transport.” The logic is that if it is delivered by its own lorry, it is a violation of the lorry transport business law. It took years to get a legal decision in court.

There seems to be more support for choosing the US stock market. In addition to properly proving the value of Korean unicorns (unlisted startups with a corporate value of over 1 trillion won), it showed the importance of a global standard.

Regulations that block innovation need to be removed

If Coupang had been listed on the Korea Exchange, he would have had a headache in devising a strategy to prevent hostile mergers and acquisitions (M&A). When appointing an audit committee member, the majority shareholder’s share is limited to 3%. The National Pension System, which is in the sphere of influence of the government, is joining the pressure of companies with its stewardship code. The National Assembly is debating the introduction of the labor director system in Korea, where labor-management conflict is sharp.

On the other hand, the United States allowed differential voting rights early in 1994. To attract innovative companies like Coupang. This is the background in which the chairman of the board of directors Kim Bum-seok, who owns only 10.2% of Coupang, secured 76.7% of the absolute voting rights. With the listing on the US stock market, it was possible to focus on management without being shaken.

With the development of the digital economy, innovative companies will continue to emerge in the future. However, as long as cobweb-like regulations persist, more Korean companies are trying to go abroad.

Korea regulates ride-sharing services, which are allowed not only in advanced countries but also in Southeast Asia. Tada Service, which created more than 12,000 jobs amid the evaluation of being an icon of the 4th industrial revolution, went aground after the’Tada Ban Act’ was enacted. Hypermarkets are forced to close twice a month because of the reason to save the traditional market. Frog-style regulation runaway in the well only drives innovative companies abroad and eliminates quality jobs.

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