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Coupang isn't the Amazon of anything

They're both speedy delivery and logistics businesses at the end of the day, but Coupang's IPO success might have more to do with South Korean culture than anything else.

Coupang isn't the Amazon of anything

Coupang's IPO was a smashing success.

Image: Coupang

South Korea's Amazon equivalent, Coupang, had its IPO debut yesterday, and it was a smashing success. (Because of course it was, it's 2021!). The company jumped 40% in its market debut, ending the day at $49.25 a share — it was priced at $35 before opening — making it the largest IPO debut in 2021 so far. The price increase gave Coupang a market cap of over $100 billion. But there's so much more to the Coupang story than a great IPO.

Coupang is a lot like Amazon, and also not at all. While they're both speedy delivery and logistics businesses at the end of the day, Coupang's success might have more to do with South Korean culture than anything else.

  • Coupang is beloved in South Korea largely for its branding. There are plenty of other great delivery companies in the tiny, densely populated country — the culture there has long been more delivery-oriented than in the U.S. — so Coupang stands out by completely rejecting "strait-laced" business vibes. Delivery drivers wear bright, colorful uniforms and drive matching vans.
  • The company has so many logistics centers that Coupang estimates every single South Korean lives within seven miles of a warehouse. That's even better than Amazon, mostly because South Korea doesn't really have any vast stretches of rural land.
  • And the company is perhaps more creative than Amazon has ever been about its delivery methods. Members can have their packages delivered in a special Coupang box in front of their homes, and they can place returns outside their house without ever having to package them up.
  • All that convenience can come at a tragically huge cost: Eight Coupang workers have allegedly died as a result of overwork in the last year alone.

The most important difference may be this: Coupang has no equivalent of the highly lucrative Amazon Web Services to fund its logistics services.

  • The company needed this IPO fundraising because it's still deeply in the red. Without additional business to offset delivery costs, Coupang's logistics investments weigh heavily on its budget. Warehouses and delivery drivers do not come cheap, and they don't pay off right away.

But that's not to say the company couldn't get there, and in an Amazon sort of way at that. Its revenue nearly doubled from 2019 to 2020, hitting $12 billion last year. That's a highly attractive investment for basically anyone. And like Jeff Bezos, Coupang CEO Bom Kim loves to talk about playing the long game. He certainly has the cash to do it.

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