Coupang: Korean E-Commerce Craze - [Business Breakdowns, EP.169]

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Jun 12, 2024

Drew Cohen, an analyst at Speedwell Research, dives into Coupang, South Korea's e-commerce powerhouse. He discusses its fascinating transformation from a Groupon-like model to an Amazon-esque giant, and how strategic pivots fueled its growth. The conversation highlights intricate cost structures, margins, and the competitive landscape, including challenges faced from players like Naver. Drew also touches on the future of Coupang in the global market and explores parallels with Amazon, offering insights into operational strategies and recruitment opportunities.

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ANECDOTE

Bom Kim's Early Ventures

Coupang's founder, Bom Kim, started with ventures like Current Magazine and a Harvard-themed magazine.
He then launched Coupong, mirroring Groupon's model in South Korea.

INSIGHT

Pivot to Amazon Model

Coupang's founder decided to pivot from a Groupon model to an Amazon model weeks before a potential IPO.
This pivot prioritized long-term sustainability over short-term profits.

INSIGHT

In-House Logistics from Day One

Coupang, unlike Amazon's initial reliance on FedEx, built its logistics network in-house from the start.
This was partly due to the unique characteristics of the Korean logistics market.

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Today, we are breaking down the South Korean e-commerce giant Coupang. If we ran through the taxonomy of investor interests, this Coupang conversation checks many boxes on that list. It is a founder-owned and operated business, a business that went through a massive pivot years into existence, a business that's replicating the Amazon model to success, and a business with healthy debates on the TAM & financial trajectory going forward.

Our guest today is Drew Cohen from Speedwell Research. We want Business Breakdowns to be the most efficient way for you to learn about a company, so we pack that information as densely as possible into about an hour of each episode, but if you are itching for more on Coupang, check out Drew's full report at speedwellresearch.com. Please enjoy this Breakdown of Coupang.

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For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:04:52) An Overview of Coupang

(00:07:49) Coupang's Founder Story

(00:10:46) The Pivot to Amazon Model

(00:13:49) Coupang's Logistics and Delivery Innovations

(00:17:32) Coupang's Market Position and Competition

(00:25:24) Consumer Behavior and Market Dynamics

(00:34:15) Understanding Gross Margins and GMV

(00:36:48) Operating Leverage and Logistics Infrastructure

(00:38:06) Future Growth and Market Expansion

(00:41:30) Advertising and Brand Dynamics

(00:48:59) Competitive Landscape and Risks

(00:56:12) Valuation and Market Perception

(00:59:15) Key Lessons from Coupang's Success