COUPANG’S OFFICES in Seoul afford a view of the South Korean e-merchant’s promise. Every daybreak the forest of high-rise house blocks teems with its vans dropping off orders made the evening earlier than. This self-styled “rocket delivery”, and Koreans’ love of it, fuelled Coupang’s stratospheric rise. When it debuted on the New York Stock Exchange in March 2021, its shares practically doubled in worth straight away. It closed its first buying and selling day with a market capitalisation of $80bn. It was the largest non-American preliminary public providing (IPO) since Alibaba, a Chinese e-commerce behemoth which listed in 2014.
Things have gone downhill from there. Coupang’s share worth 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 bought a tranche of the identical dimension for $1.7bn six months earlier. The agency has been caught up in a broader sell-off in unstable 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 comprise inflation. This has harm the world’s Amazon wannabes (see chart) and made buyers much less tolerant of heavy losses within the pursuit of development—$1.5bn final yr in Coupang’s case.
The agency stays assured. On May eleventh it reported buoyant first-quarter outcomes. Sales rose by 22% yr on yr, to $5.1bn. Although it booked one other internet loss, its core enterprise really turned worthwhile on an adjusted foundation, sooner than anticipated. Its shares seemed set to start out buying and selling a fifth increased the following day, after The Economist went to press.
Nearly half its internet loss final yr was defined by reinvestment, particularly in its infrastructure. Some 70% of South Koreans now dwell inside 10km of certainly one of its warehouses. E-commerce rivals akin to Naver and eBay Korea lack its footprint. Traditional retailers with established logistics networks are much less technologically refined. Its workforce is made up of workers moderately than gig employees, 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 trying to lock in earnings 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 stepping into meals and grocery supply, video-streaming and fintech, with a “buy-now-pay-later” scheme to enrich its personal e-payment system. That has helped it draw extra individuals into its empire. In the primary quarter the variety of energetic prospects grew by 13% yr on yr, to 18m, having risen by double digits in earlier quarters. Last 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 gasoline. ■
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