'Coupang Situation' Dominates Year-End... Biggest Beneficiary Is CJ Logistics [Click e-Stock]

Coupang's Market Share Likely to Shrink Under Government Pressure
CJ Logistics Poised to Become the Alternative Logistics Provider

The so-called 'Coupang situation' has had a significant impact on the stock prices of transportation companies, with analysts predicting that CJ Logistics will be the biggest beneficiary. The reasoning is that if Coupang's market share declines due to government pressure, domestic e-commerce companies are likely to choose CJ Logistics as an alternative logistics provider.

On December 31, KB Securities cited this background in naming CJ Logistics as its top pick in the transportation sector and raised its target price by about 18% to 130,000 won. The previous day's closing price was 94,600 won.

For CJ Logistics, the key issue is not short-term profit improvement but rather changes in the long-term competitive landscape, with particular attention paid to the Coupang situation. The analysis indicates that Coupang has been the de facto competitor with the greatest impact on CJ Logistics' stock price. Previously, CJ Logistics' stock price peaked and then declined in both 2016, when Amazon began to expand its logistics business, and in 2021, when Coupang secured sufficient financial resources to invest in logistics like Amazon after its IPO.

As long as Coupang continues to grow in e-commerce, CJ Logistics' parcel delivery business is structurally constrained. While most other e-commerce companies outsource delivery to external firms such as CJ Logistics, Coupang handles logistics in-house. As Coupang rapidly expands its presence in the e-commerce market, its share of the parcel delivery market has already reached about 40%, overtaking CJ Logistics. Even when CJ Logistics' performance improved, its stock price declined, which is attributed to this context.

KB Securities analyzed that under these circumstances, the current Coupang situation could serve as a positive turning point for CJ Logistics' stock price. Kang Sungjin, a researcher at KB Securities, stated, "It will be difficult for domestic consumers to suddenly reduce their reliance on Coupang, but there is a high likelihood that the government and National Assembly will seek to restrict Coupang's growth from an antitrust regulatory perspective," adding, "Although Coupang already functions as a key infrastructure in domestic distribution and logistics, it gives the impression of resisting parliamentary oversight."

Regulation of foreign corporate platforms that serve as national infrastructure has become increasingly common. Last year, Japan applied the Telecommunications Business Act and the Economic Security Act to intervene in Naver's management control over LINE. The United States also demanded last year that Chinese company ByteDance sell its U.S. operations of TikTok. In Korea, there is analysis that if Coupang becomes a monopolistic operator and is deemed a real threat to 'digital sovereignty,' the government could intervene in its management control. This could become a strong pressure point for Coupang and its Chairman, Kim Beomseok.

KB Securities ultimately expects Coupang to negotiate with the Korean government. In such a case, the government would likely demand improvements in areas that have sparked controversy, such as information security, labor relations, and payment deadlines for sales proceeds. Ultimately, the government is expected to seek to ease Coupang's dominance in distribution and logistics and reduce excessive reliance on the company.

Should these developments materialize, they would be positive for CJ Logistics' long-term stock performance. Kang further commented, "If Coupang's growth slows, domestic e-commerce companies will strive to enhance their delivery services to a level comparable to Coupang in order to attract consumers leaving Coupang, and CJ Logistics stands to benefit from this trend. Just as CJ Logistics' stock price declined after 2016 due to concerns over Coupang despite steady profit growth, there is a strong possibility that after 2026, its stock price will continue to rise regardless of short-term profit fluctuations."