The crown jewel in SoftBank’s investment portfolio is Chinese e-commerce giant Alibaba. Now SoftBank is hoping for a repeat in South Korea.
Coupang, a fast-growing Korean e-commerce company founded in 2010, filed an initial public offering in New York this month that could take place as early as March. It is expected to value Coupang at over $ 50 billion, the most for a foreign company since Alibaba in 2014, creating another windfall for SoftBank’s Vision Fund. The Japanese company owns 38%, a stake it acquired by investing a total of just $ 2.7 billion since 2015.
Coupang quickly became Korea’s largest e-commerce player, according to Euromonitor International – with $ 12 billion in revenue last year, its IPO prospectus says, up from $ 2.4 billion in 2017. Although still unprofitable, the company reduced its losses by about a third. year. Coupang has invested heavily in building its own delivery network and distribution centers, which helps it attract customers with next day delivery and easy returns.
As in other countries, e-commerce increased sharply in Korea during the pandemic. But online shopping has been popular there for a long time and will account for 28.9% of retail sales in 2021, according to the forecast of the eMarketer market research, after China. Korea’s population density helps: About half of the country’s 52 million people live in Greater Seoul, making it easier for Coupang to achieve the fast delivery it promises.
Coupang toppled eBay as the market leader, but the industry remains fragmented. One of the main competitors is local giant Naver, whose leading position in search and payments has also helped it get into online shopping. Its e-commerce revenue grew 38% last year compared to 2019 and it has partners in CJ Logistics, one of Korea’s largest logistics companies, and BGF Retail, which operates its most large chain of convenience stores.