Watching Movies, Eating, and Shopping... Coupang Does It All

Minimum IPO Fundraising Amount 1 Trillion Won... Expansion of Fulfillment Services
Aggressive Investment Focused on New Businesses like Coupang Play and Coupang Eats Announced

#. Office worker Kim Jeonghee (alias) finds joy in watching the latest movies at home after work. She does this through Coupang’s video service (OTT) ‘Coupang Play.’ When she hasn’t prepared dinner while watching movies, she orders food via ‘Coupang Eats.’ Before going to bed, watching Coupang’s live commerce is her way of wrapping up the day. The products she purchases are delivered to her doorstep by early morning. Kim suddenly wonders, “How did I ever live without Coupang?”?a phrase Coupang has emphasized so much.

The changes that could arise in our lives centered around Coupang’s new businesses go beyond simply buying goods cheaply online and receiving fast delivery. Watching the latest content on OTT, ordering food through delivery apps, and expanding shopping into live commerce can influence many aspects of daily life. Coupang plans to secure the momentum to make this possible through its listing on the U.S. stock market.

It is also expected that a tectonic shift will occur in the existing domestic e-commerce market landscape. This is because Coupang, which led market changes through aggressive investment after introducing ‘Rocket Delivery’ in 2014, has clearly stated its intention to further expand investments after going public. The domestic e-commerce market, where major distribution conglomerates and platform companies have also entered, has already begun fierce survival competition amid the COVID-19 pandemic.

◆ Expansion of New Businesses = Coupang revealed in its listing application documents submitted to the U.S. Securities and Exchange Commission (SEC) that it plans to raise $1 billion (about 1.1 trillion KRW). Industry insiders expect the actual amount raised to be much larger, given that Coupang’s corporate value is estimated at over $50 billion. After going public, Coupang’s clear commitment to expanding investments means it will inject at least several trillion won into the domestic market.

What stands out is Coupang’s aggressively expanding new business sectors. Coupang Eats, Coupang’s delivery app, quickly established itself in the market last year amid increased delivery demand driven by the COVID-19 pandemic. However, the gap with the market leader, Baedal Minjok, remains significant. An industry insider predicted, “Competition is becoming increasingly fierce, so more aggressive investments will continue to expand Coupang Eats’ market share.”

Investment is also needed for the officially launched OTT service. Although introduced as a service for Wow Membership subscribers, Coupang must strengthen differentiated content to compete in a market dominated by Netflix and others. This is why Coupang plans to produce original content in the future. The live commerce service, launched last month, is also considered a field where Coupang will increase investment. Coupang is differentiating itself by emphasizing that anyone can become a creator introducing various Coupang products. The growth potential is also significant. According to Ebest Investment & Securities, the domestic live commerce market size was estimated at around 3 trillion KRW last year and is expected to expand to about 8 trillion KRW by 2023. Additionally, Coupang is preparing related businesses after reacquiring its parcel delivery operator license, so investments in this area are also expected.

◆ Expansion of Fulfillment Services = It is anticipated that Coupang will accelerate the expansion of its ‘fulfillment’ services using funds raised through its listing. Fulfillment is an integrated logistics management system that oversees everything from storage, packaging, and delivery to inventory management. Coupang has proven its competitiveness in this area through Rocket Delivery. It is expected to expand the range of Rocket Delivery products that it purchases directly while also broadening the scope of ‘Rocket Partnership’ services offered to open market sellers. In its listing application documents, Coupang stated, “We expect to continue significant capital expenditures in the near future,” adding, “We will build fulfillment and logistics centers to expand service areas, reduce delivery times, and optimize cost structures.”

With Coupang’s increased investments, alliances and mergers among competitors are also expected, making a market reshuffle driven by Coupang inevitable this year. Naver already partnered with CJ Group last year and has begun full-scale fulfillment business operations. 11st is strategizing with Amazon to target a global distribution platform. There are also many variables, such as the ongoing sale of eBay Korea, which operates Gmarket and Auction.

Coupang has also laid the groundwork for investment expansion by granting ‘dual-class voting rights’ to its founder and Chairman of the Board, Kim Beom-seok. The Class B shares held by Chairman Kim carry 29 times the voting rights of the regular Class A shares. This means that even with only a 2% stake, he can exercise shareholder rights equivalent to 58%. An industry insider said, “As the e-commerce market undergoes rapid changes this year, Coupang’s listing and investment expansion will lead to even fiercer competition.”