In early April, the South Korean e-commerce giant announced that it did entering the Singapore market, which marks its first foray abroad during its 11 years of operation.
Apparently, Coupang has been looking for ways to enter Singapore since last July acquired Singtel’s video streaming service provider, Hooq Digital Ltd..
The Korean Economic Daily reported that the company has started hiring rounds for its Singapore entity since March.
Turned on Glass door, is looking for Head of Operations, Head of Logistics and Head of Retail, as well as other positions as a Senior UX Designer, Business Analyst (for Coupang Play) and Senior Quality Assurance Engineer.
Its entry into Singapore will definitely shake up the local e-commerce landscape, which is currently dominated by Shopee with the support of Tencent, Lazada with the support of Alibaba and Qoo10.
This article explores the founding history of Coupang and how it grew to become South Korea’s most popular online retailer.
Who is Coupang?
Kim Bom started Coupang in 2010 after leaving Harvard Business School a year later.
“I knew I wanted to start something in trade (in Korea),” he said Forbes in a 2016 interview.
Coupang first started as a Groupon-style daily bidding business, before evolving to become a third-party online marketplace in 2013, which closely resembled eBay.
It listed third-party inventory from local vendors, offering fast delivery, low prices, and an “amazing” customer experience.
This model was a success. In three years, the platform exceeded US $ 1 billion in sales and became profitable.
One of the key factors that drove Coupang’s popularity is its fast delivery options, driven by its own 24-hour logistics business called Rocket Delivery.
Buyers can choose from millions of products, from fresh produce to electronics, and opt for overnight or same-day delivery.
In 2019, Coupang further accelerated delivery speeds with the launch of Dawn Delivery, which promises to deliver at 7 a.m. for orders placed at midnight the day before.
The company has committed billions to building and strengthening its logistics infrastructure, which includes warehouses, truck fleets and thousands of delivery drivers known as “Coupangmen”.
He believes that when customers get used to fast delivery speeds, they will ask for more over time, which will result in increased sales.
We can’t double customers to what we want, but we can bend to what customers want.
– Kim Bom, founder of Coupang a Forbes interview in 2016
According to Coupang, 70% of Koreans live within 10 minutes of a Coupang logistics center, reducing the delivery distance of the last mile.
He also hired his own delivery employees, getting them to train and align incentives with the company’s values.
Through vertical integration of compliance and delivery, Coupang was not only able to deliver faster than competitors, but also controlled its customer experience, thus increasing its customer satisfaction significantly.
Kim believes the level of detail is what has helped differentiate her business in an extremely competitive market. Although Amazon is not active in South Korea, Coupang topped the position local names like Gmarket and 11Street will be named the consumer-preferred online retailer in 2019.
Coupang said its logistics investments have paid off, as 99.3% of orders placed on its site are delivered in a day. Coupang now delivers 3.3 million items daily, compared to an average of 2.2 million units per day at the end of 2019.
He added that more than half of all Koreans have downloaded the Coupang app.
Coupang has definitely grown by lowering prices and speeding up deliveries, earning it the name “Amazon of South Korea”. Last year, Coupang also took second place CNBC Disruptor List 50 List 50 of the most innovative companies in the world.
Beyond e-commerce, it offers food prepared through the Coupang Eats name and offers video broadcasts under the Coupang Play label.
Covid-19 drove a boom in e-commerce
Coupang has weathered much of its challenges due to the coronavirus pandemic.
While being asked to stay home, millions of South Koreans resorted to online shopping more than before to order staples like face masks and hand sanitizer.
In January last year, Coupang was hit by a wave of disruptions in the supply chain, prices and logistics capacity, fueled by widespread panic buying. In addition, he faced an outbreak of coronavirus cases in a warehouse near Seoul, fueling concern that it would not take proper security measures.
Coupang maintains that it always provided workers with gloves and masks every day, disinfected facilities, as well as implemented temperature controls and “testing and tracking protocols”.
The company quickly managed the flood of orders and not only maintained service levels, but also improved them in some areas, Coupang said.
As the volume of orders increased, it expanded during the day and same day delivery to more items such as consumables and fresh food. The company also opened a new logistics center in March 2020, which increased its capacity to fulfill orders.
De Coupang growth accelerated throughout 2020, from 79% year-on-year in the first quarter to 100% in the fourth.
In accordance with ReutersCoupang’s daily shipments increased from 2.2 million daily at the end of 2019 to 3 million daily by mid-February 2020.
Coupang is made public, now valued at over US $ 60 million
Over the past decade, Kim has raised $ 3.8 billion in financing from a large number of Silicon Valley venture capital firms, including SoftBank, Sequoia Capital and BlackRock.
Behind Coupang’s strong growth, investors had told Kim to make the company public, but he believed it was not the right time.
We had to be honest with ourselves and say that once made public, it’s much harder, at least in the short term, to really pivot or change direction.
We had to ask ourselves, ‘The platform we had built, were the services and experiences we offered our customers, creating a five percent difference or did we create this kind of world where the customers we love, their jaws pull?’ And the reality was no.
– Kim Bom, founder of Coupang a CNBC’s Make it interview
So he dismissed the idea of going public and decided to transform Coupang into an end-to-end e-commerce platform. He felt that a massive change was needed to provide something that really mattered to customers.
“We had to change our whole pile of technology, our way of doing business, our business model. I think it was the hardest, but the choice of which I am most proud of. ” dit Kim.
This decision finally bore fruit. In 2018, SoftBank invested $ 2 billion in Coupang, which gave it an amount valuation of US $ 9 billion, which made it the most valuable startup in South Korea.
The following year, it accumulated sales in excess of US $ 10 billion, with year-on-year growth of 60%.
Coupang finally left public on a US $ 4.6 billion IPO in March on the New York Stock Exchange. It is considered South Korea’s most valuable startup, as its market capitalization now stands at US $ 67 billion, although it briefly exceeded a market value of US $ 100 billion.
Kim also saw his net worth increase more than sixfold after going public to $ 6.4 billion, making him the biggest winner this year. List of rich in Korea.
Coupang’s IPO was the largest listing in the U.S. by a foreign company since Alibaba’s debut in 2014.
Kim has stopped in the middle of the reaction
Despite the company’s popularity, it has faced scrutiny after reports of several deaths among delivery and logistics employees who were allegedly overworked.
Coupang now faces a wave of boycotts to the consumer for his handling of a fire that killed one person and destroyed his largest logistics center.
More than 7,000 people have joined public petitions on the website of the South Korean presidential office, where U.S.-based Coupang executives, including Kim, are being held accountable for job security and internships. labor.
On June 17, Kim resigned as chairman of the board and as a registered director of Coupang Corp. The company reasoned that Kim’s resignation was because she wants to “be committed to global management after listing on the New York Stock Exchange.”
Kim remains the CEO and Chairman of the Board of Coupang Inc. Going forward, he said he will focus on the company’s foreign business.
Today, Coupang has offices in Beijing, Los Angeles, Seattle and Singapore and Silicon Valley, as well as its Seoul headquarters.
Vice President Label brings together all the best local produce so you can discover them in one place. Join us to support Singapore’s national brands:
Featured Image Credit: Coupang