Inside South Korea e-commerce giant Coupang



The largest foreign IPO on a U.S. exchange since Alibaba will start trading Thursday. E-commerce giant Coupang has priced its IPO at $35 per share, which would value the company at $60 billion. CNBC’s Andrew Ross Sorkin reports. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

Investors looking to buy shares of South Korean e-commerce firm Coupang when it goes public in New York should consider if the company has what it takes to be profitable in the future.

That’s the advice Daniel Yoo, head of global asset allocation at Yuanta Securities, Korea, has for clients.


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“What you really need to know is whether or not, in the business environment of Korea and e-commerce, can they be able to generate a huge, profitable return on capital,” Yoo said Thursday on CNBC’s “Street Signs Asia.”

Coupang is set to debut on the New York Stock Exchange under the ticker “CPNG” later in the day when U.S. markets open.

The company said it had priced 130 million shares at $35 apiece, raising $4.55 billion and valuing the company around $60 billion. That makes Coupang the largest IPO in the U.S. this year and one of the top 25 biggest listings of all time stateside, by deal size.

The price is also above the company’s most recent expected range of between $32 and $34 a share.

Market leader

Yoo explained that the valuation and IPO price likely rose because Coupang is the only e-commerce company in South Korea that showed a sizeable gain in market share last year. He said its market size rose from 18.1% in 2019 to about 24.6% last year due to the coronavirus pandemic.

“Most of the other competitors really did not show any type of changes in terms of market share,” he said. Coupang’s rivals include eBay-owned Gmarket, WeMakePrice, Naver Shopping among others.

“The fact is that (Coupang is) becoming the biggest e-commerce business within Korea and 24% market share, I think, it might actually even rise further,” Yoo said. “It is possible that they can actually gain as much as 30%+ over the next few years.” That, he explained, would justify why the company’s IPO price has increased.

Coupang’s regulatory filing showed the company sustained losses over eight quarters through Dec. 31. But a sharp jump in sales last year helped narrow net losses from $770.2 million in 2019 to $567.6 million in 2020

Comparisons with Alibaba, Amazon

The company, whose prominent backers include SoftBank’s Vision Fund and Sequoia Capital, has drawn comparisons with Amazon and Alibaba. Those firms have become tech behemoths after making their public debuts.

But Yoo said that the consumer markets in the U.S. and China are significantly larger than South Korea. So, even if Coupang is able to increase its market share, he said it is unlikely to see the same kind of sales growth the other two companies saw in the last decade.

South Korea’s e-commerce market has an estimated value of $90.1 billion in 2020 with an annual growth rate of 22.3%, according to data analytics firm GlobalData. That is expected to grow at a compounded annual rate of 12% to reach $141.8 billion in 2024.

Spending some of its IPO proceeds on building out a strong distribution platform within Korea could benefit Coupang, according to Yoo.

The e-commerce firm was founded by Korean-American billionaire Bom Suk Kim in 2010 and is headquartered in Seoul. It has more than 100 fulfilment and logistics centers in over 30 cities that provide next-day delivery for orders placed before midnight. Coupang employs 15,000 drivers in South Korea for its deliveries and has branched out into other services such as food and grocery delivery.

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30 thoughts on “Inside South Korea e-commerce giant Coupang

  • July 4, 2022 at 5:15 pm
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    CPNG is the future of e-commerce same day and dawn delivery.. it's just a matter of time for the company to build out its logistics and scale.. it took Amazon 10 years to show profits.. Amazon started off by selling books and the experts said that they would never succeed and yet they were all proven horribly wrong.. concentrating on customer service over short-term profits is the driver to long-term profit.. the turtle wins this race..

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  • July 4, 2022 at 5:15 pm
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    They treat their employees like slave.

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  • July 4, 2022 at 5:15 pm
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    김범석의 얼굴 표정이나 대화시에 나타나는 제스쳐들이 한국문화권에서 태어난 사람이라고 할 수 없는 전형적인 서구문화권 표정과 몸짓 제스처를 보여주고 있다 쿠팡은 한국인 CEO를 내세운 미국기업이라 보는게 맞을 것 같다.

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  • July 4, 2022 at 5:15 pm
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    It’s hard for this company to be profitable

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  • July 4, 2022 at 5:15 pm
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    Coupang's Dawn Delivery (Rocket Delivery) killed 3 delivery workers in past 2 months in Korea. If we go back further the numbers will increase. Investors should understand warehouse and delivery workers' working conditions in Korea. This is not a sustainable model. Also Coupang delays payments to sellers and allows Buy Box, product image & details & reviews to go to the lowest pricing seller triggering extreme competition between sellers (to a point where seller no longer make any profit) and allows image licenses and reviews to be stolen from the original seller. This company has one of the worst Corporate Social Responsibility reputations. Bom Kim didn't even show up to the National Assembly Audit (Parliament Inquiry) saying that he was injured from playing basketball. What a f**king joke. Smart customers in Korea will eventually move away from using Coupang.

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  • July 4, 2022 at 5:15 pm
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    coupang news almost never mentions Naver.

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  • July 4, 2022 at 5:15 pm
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    As a Korean, I want Coupang to succeed but lots of headwinds against them. Plus, CNBC deleting their original CEO interview where he deflects answering when Coupang will be profitable 3 times is highly sus

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  • July 4, 2022 at 5:15 pm
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    The thoughtless anteater serendipitously bore because marble cytologically succeed concerning a taboo cat. better, wanting wheel

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  • July 4, 2022 at 5:15 pm
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    Spell Kupang, not Kupaeng! Aaargh!

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  • July 4, 2022 at 5:15 pm
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    쿠팡 말고 네이버를 사라

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  • July 4, 2022 at 5:15 pm
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    Valuation is insane.. honestly… and this company does not run in automation in runs in slavery.

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  • July 4, 2022 at 5:15 pm
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    Traitor, cold hearted CEO. Many delivery workers died on their shifts working for Coupang in South Korea. He was indifferent to their plight and many worked under incredibly demanding working environment. The workers usually put in 15 to 20hours to meet surging demands in packages. They even have delivery schedule for people who want express service before they go to work in the wee hours of morning before dawn.
    He asked to cut their share of shipping fees in order to fatten executives already deep pockets by threatening with job termination. This is as bad as any sweatshop condition on a daily basis. The whole world must know about this. None of this will improve working conditions without voicing this aloud to be heard.

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  • July 4, 2022 at 5:15 pm
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    Coupang is making history!! A start up company not from chaebol is now 3rd valuable company in korea!! Respect

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  • July 4, 2022 at 5:15 pm
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    mr kim coopang workers(espcially deliverers) are dying on street because of hard work plz solve it

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  • July 4, 2022 at 5:15 pm
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    Over valued and unethical. Many delivery employees died due to burn out during COVID. I will not put my money on this company’s stock.

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  • July 4, 2022 at 5:15 pm
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    How do you mispronounce the name of the company when the CEO literally says it for you?

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  • July 4, 2022 at 5:15 pm
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    검은머리외국인

    Reply
  • July 4, 2022 at 5:15 pm
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    쿠팽ㅎㅎ 발음 넘 웃겨😂

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  • July 4, 2022 at 5:15 pm
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    This one's a hard no from me, at the current valuations of course.

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  • July 4, 2022 at 5:15 pm
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    The wonderful seal basically measure because euphonium neuropathologically shade abaft a silent carp. exultant, imperfect popcorn

    Reply
  • July 4, 2022 at 5:15 pm
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    i literally saw a DD on this on Reddit investing today lol

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  • July 4, 2022 at 5:15 pm
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    아마존 따라 잡자!!!

    Reply
  • July 4, 2022 at 5:15 pm
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    멋져요~~ 코리아 화이팅!!!

    Reply
  • July 4, 2022 at 5:15 pm
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    Unless they penetrate the North Korean 🇰🇵 market, I won't be investing in them…

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  • July 4, 2022 at 5:15 pm
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    I’m selling some shares of Rblx to buy coupang today

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  • July 4, 2022 at 5:15 pm
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    Too bad I just bought 25k worth of PDD

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  • July 4, 2022 at 5:15 pm
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    와 이런날이 오는구나!!!!!!

    Reply

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