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| Coupang's distribution center in Incheon, northwestern Seoul. Courtesy of Coupang |
By Kim Yoo-chul
Some experts consider Coupang, South Korea's top-tier online retail platform operator, as an "unprofitable company." However, it is still attracting investors and expanding its services, helping it maintain solid corporate value.
Based in Seoul, South Korea, Coupang won financial assistance from SoftBank-owned Vision Fund in November 2018. Thanks to the $2 billion investment from the fund, the company's value soared to about $9 billion with the company increasing sales steadily. MIT Technology Review viewed Coupang as one of the "50 Smartest Companies in the World," while Forbes included the company in its list of "30 Global Game Changers."
Given the business difficulties SoftBank is facing, there were concerns that SoftBank's moves to sell unprofitable and non-core assets would also affect Coupang.
In a note to clients, South Korea's SK Securities said SoftBank CEO Masayoshi Son "will continue to invest in Coupang."
"Coupang will be launching 'Coupang Fulfillment Service,' which could help the company turn a profit ahead of going public," said SK Securities analyst Yoo Seung-woo. "Coupang's value can only go up after SoftBank CEO and Naver's Global Investment Officer Lee Hae-jin joined hands last year."
SoftBank is said to be prepared to unload some assets to raise possibly up to 4.5 trillion yen (51.7 trillion won) to reduce debts and buy back its own shares, Japanese media reports said.
"One cannot rule out the possibility of the fund selling Coupang shares, but Coupang has been showing stable growth despite the effects from the COVID-19 outbreak," Yoo added. "Coupang's February transaction amount data shows it reached 1.6 trillion won this month, the largest for the company. SoftBank may be shaken, but that is unlikely to have any effect on Coupang attracting additional investments."
Established and founded by Kim Bom in 2010, Coupang sells a wide range of products through its online retail platform. It has its own delivery and distribution infrastructure including warehouses, distribution and fulfillment centers. Coupang was preparing for an initial public offering (IPO) for additional external growth, which it believes would be a critical catalyst to compete with its chief rivals.
