Coupang is the Amazon.com in South Korea, but maybe even better.

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The more I learn, the more I learn

Coupang,

the more I want to move to Seoul.

South Korea’s largest e-commerce company, Coupang (ticker: CPNG), went public last week in stunning fashion. It is now the second largest public company in the country, just slowing down

Samsung Electronics.

It was the first largest public offering in the U.S. by a foreign publisher since

Alibaba Group holds

in 2014, and the largest new U.S. magazine of any kind since

Uber Technologies

in 2019.

Founded in 2010 by Bom Kim, Harvard Business School, Coupang has grown into a major force in the South Korean economy. The company accounts for 4% of the country’s consumer trade, with a wide range of online sales services: Think

Amazon.com

plus Instacart,

DorasDash,

and

Netflix.

Coupang has around 50,000 employees and plans to hire another 50,000 Koreans by 2025.

Coupang may be similar to Amazon, but it has important geographical advantages. South Korea is a tech-savvy, superdense, populated country with more than 50 million people. Eric Kim, who sat on the Coupang board from 2011 to 2017 while managing director of Maverick Capital, an investor in the company, notes that South Indiana has about the same land mass. to Indiana – only nearly 10 times the population. Take out the uninhabited mountain regions, he adds, and all of these people are tied into an area the size of Rhode Island.

That high density helps make Coupang superresponsive. The company has 25 million square feet of warehouse space, spread over 100 locations in more than 30 cities. Coupang says 70% of Koreans live within seven miles of one of its distribution centers. Almost anything can be ordered on the same day, and “morning delivery” ensures that goods ordered before midnight are delivered before 7am

Coupang has also eliminated the need for cardboard boxes and bubble wrap for 75% delivery. (We’ll see you do that, Amazon.) Coupang Fresh, the company’s online grocery service, puts goods in reusable containers – leave them at the door and one in 15,000 people will Coupang deliveries are sent for reuse. Returning goods? Leave them outside your door – no special package or printed label is required.

Coupang had 2020 revenues of $ 12 billion, up 91% from the previous year, as the pandemic helped accelerate growth from 55% in 2019 and 69% in 2018. Growth was over 90% in all one of the last four quarters.

While not yet profitable, the company is growing close. Coupang’s profit margin, as measured by adjusted earnings before interest, taxes, depreciation and depreciation, was at 2.1% last year, compared to 8.8% the previous year. And that reveals some unusual costs to protect workers from the pandemic.

In the IPO, Coupang sold 130 million shares at $ 35 each. The stock opened for trading at $ 63.50, giving the company a $ 114 billion market cap. The stock then moved lower, closing on Thursday at just under $ 50 a share, for a just shy valuation of $ 90 billion.

Coupang shares are not free –

eBay

(EBAY) is a relative revenue and less than half the market share. And the stock trades at a small price to Alibaba (BABA) based on a 12-month sell-off. But Coupang has some distinct advantages. Alibaba has strong competition from companies such as Pinduoduo and

JD.com.

Alibaba’s growth rate is less than half that of Coupang. And Coupang’s Chinese Communist Party is not looking over his shoulder.

One thing Alibaba and Coupang have in common is a close relationship with

SoftBank Group

(SFTBY) – the Japanese investment firm is the largest investor in both companies.

SoftBank invested $ 700 million in Coupang in 2015. In 2018, SoftBank Vision Fund, the company’s $ 100 billion venture portfolio established in 2016, invested another $ 2 billion in a contract led by Lydia Jett , a Vision Fund executive now on board Coupang. The initial investment was brought into the Vision Fund, for a total bet of $ 2.7 billion. That tranche is now worth $ 30 billion. It’s a monster win – and probably the biggest exit ever for a contract led by a female venture investor.

SoftBank did not sell any shares in the offer, and Jett says in an interview with Barron’s that the company intends to be a long-term investor, as it was with Alibaba. More than 20 years after its initial investment, SoftBank remains the single largest custodian in Alibaba.

“We are set up to keep Coupang in the long run,” Jett says. “There’s a lot of room left in a $ 500 billion retail market.”

It seems strange that South Korea, one of the most technologically advanced countries, has played such a small role in the U.S. stock market. Coupang was the first Korean tech company to go public here in more than a decade. Jay Ritter, a business school professor at the University of Florida that studies the IPO market, says that only six Korean tech companies have gone public in the U.S. market, all from 1999 to 2006. That list including Gmarket, an e-commerce company that went public in 2006 and was acquired by eBay for $ 1.2 billion in 2009. EBay has announced that it is seeking a buyer for its Korean business. None of the most famous tech and manufacturing companies in Korea – Samsung,

LG,

Motor Hyundai,

Kia,

SK Hynix

– provide US listings.

Jett believes Coupang’s deal will be a turning point for Korea’s venture capital market. She says there is a misunderstanding that Korean technical companies were not innovative enough. “That door has exploded now,” she says. “This will transform the way Korean companies are funded. This is just the beginning. ”

Write to Eric J. Savitz at [email protected]