There was no such company… Coupang’s Bold and Scary Mission Park Dong-hui’s Consumer Report

The’mission’ Coupang pursues is both bold and scary. ‘To create a world where people think how they would have lived without Coupang’ is the goal of Coupang’s executives and employees, including founder Kim Bum-seok. It also means that it is difficult to define Coupang only with the framework of e-commerce (e-commerce) that sells items online and delivers them quickly to the front of the house. On the 24th, Coupang released’Coupang Play’ and officially entered the OTT (contents providing service through the Internet) market. Interest is focused on how far the evolution of Coupang will take place.

◆OTT advance, unexpected quiet start

Coupang Play, which was unveiled by Coupang on the day, is evaluated as close to an additional service for Wow members, which is a paid membership (2900 won per month). Paid members with more than 5 million people can view various contents provided by Coupang Play for free in addition to the existing free shipping and returns. Another advantage is that up to 5 people can watch it with one account.

The price is cheaper than Netflix (about 3.6 million members), which can be viewed by up to 4 people per month for 14,500 won (premium service), but it is generally evaluated that it is inferior to Netflix in terms of content diversity. Even Coupang himself said, “The beginning is weak.” In the IT (information technology) and content industries, it is interpreted that Coupang has chosen a strategy of tapping the stone bridge instead of a’splendid start’.

It might attract attention by head-to-head on Netflix with large fish-class content, but it is said that it was determined that if the service was not smooth due to a sudden increase in usage at the beginning, it would be more profitable than profit. An official in the content industry said, “Coupang is in negotiations with large content creators (CPs), including the right to broadcast sports such as major leagues.” An official from Coupang said, “We will show content that cannot be seen on other OTT services, such as the latest American TV series starring Brian Cranston, “Your Honor” and educational news content “CNN10”.”

Experts say that Coupang’s entry into the OTT market will be a weapon in addition to expanding the number of WoW members. When trying to expand the territory of Coupang overseas, it is possible to enter the e-commerce market with Coupang Play, which includes K-contents. Coupang acquired Southeast Asian video streaming company’Hooq’ in July to establish an OTT platform.

The path to advance into the new concept distribution market that combines content and commerce will open. This means that it is possible to commercialize tangible and intangible contents possessed by so-called’influencers’ who have high influence on the public, such as Hallyu stars and famous YouTubers, so that they can be traded on the platform called Coupang. There is a high possibility that Coupang benchmarks the model of Much Buy Amazon, which sells its own design products through a POD (print on demand) method.

◆”Coupang is an unprecedented enterprise type”

The point of watching in the future is how far Coupang’s service will evolve. Coupang started as a social commerce company (Coupang was short for’Coupon is Pangfang’) with Timon and Wemake in 2010, and emerged as a powerhouse in e-commerce that threatens large offline distribution companies such as E-Mart.

By creating more than 170 logistics facilities nationwide,’rocket delivery’ was made daily. Thanks to this, Coupang’s sales increased annually, which was only 3484 billion won in 2014, and recorded 7,153 trillion won last year, only five years later. With e-commerce exploding due to the novel coronavirus infection (Corona 19), sales are expected to reach 10 trillion won this year.

Despite such growth, the gaze toward Coupang is extreme. An official of a large retailer said, “There is no company that can survive with an annual loss of trillions,” and said, “Coupang will be difficult to survive without receiving external funds through additional investment or listing.”

There are also many critical views of Coupang’s’Amazon Way’. ‘Amazon has also avoided the deficit, but its annual profit is much smaller than that of other IT companies such as Google’ and’There are few successful cases of Amazon’s overseas expansion’.

However, it is not easy to point out that Coupang or Amazon should not be viewed as a framework for analyzing existing companies. One IT expert said, “If you look at Amazon’s performance (profit) curve, it has almost unchanged for several years, and it has been showing a close to a straight line.” He said, “By investing in new businesses like space, drones, and autonomous driving, you can artificially profit. It is correct to see that it is being adjusted.” It is an analysis that it has deviated from the conventional notion that a company’s goal is to produce higher profits compared to the previous year.

Organization that encourages new business challenges

Coupang’s evolution can also be interpreted in the same context as the Amazon Way. Despite the deficit for many years, Coupang is constantly challenging new businesses. A representative example of Coupang’s challenging spirit is running a PO (product owner) job, also known as’mini CEO’.

About 80 POs are responsible for presenting ideas for new businesses or improving the functions and performance of existing businesses. While general large corporations create separate organizations such as new business teams to discover new businesses, Coupang plantes POs in each department and discovers new businesses based on the field.

When an idea is adopted, POs are allocated resources necessary for commercialization such as developers and operate like CEOs. Coupang Play is also a PO, director Kim Seong-han, who is in charge of the practice. An official from Coupang said, “Coupang does not have an annual business plan or regular greetings at the end of the year,” and said, “I will continue to take on new challenges so that I can think of how I would have lived without Coupang.”

◆Autonomous delivery is the future goal

It can be seen from the perspective of a new business that Coupang invested about 300 billion won this year alone related to the COVID-19 quarantine. It is an investment of a scale that cannot be readily done solely by fears that the spread of an infectious disease from the distribution center will hurt corporate credibility. If you’re a regular company, it’s very likely that this money was used to fill the deficit.

Considering that Coupang is an IT service company with more than 2,000 IT engineers, experts point out that you can understand the meaning of the investment. It is inferred that Coupang’s new business could be providing enterprise solutions related to IT security including quarantine.

Coupang’s trillion-dollar deficit, while continuing to build logistics facilities, and direct operation of delivery vehicles and delivery engineers can be interpreted from the concept of future investment. In the same vein, Uber’s CTO (Chief Technology Officer), Tuan Pam, was recruited as its CTO.

In the distribution and IT industry, it is believed that Coupang is constantly accumulating data to build a delivery system based on autonomous driving. Uber’s new CTO said about the reason for the move to Coupang: “It is an experience that no one can do to challenge the AI ​​vehicle dispatch system in a dense city like Korea.” Softbank Chairman Son Jeong-eui, who has invested $3 billion in Coupang, has also formed an alliance with Uber and Alibaba.

Reporter Park Donghui [email protected]