Mar 22, 2021
Find Out More About Coupang’s IPO
South Korea’s leading e-commerce company focuses on low prices and fast deliveries.
There’s Amazon in the U.S., and Alibaba in China. Now meet South Korea’s dominant e-commerce platform Coupang, which went public on March 11, 2021.
Coupang, which to date had the biggest IPO of the year, raising $4.6 billion, has approximately a quarter of South Korea’s digital commerce market share. It is also the most commonly used e-commerce platform there, with nearly two thirds of consumers reporting they use the site frequently, according to research compiled by the venture capital firm Goodwater.*
One reason for the uptake could be the speed of Coupang’s deliveries, made possible by its buildout of a robust delivery infrastructure. In comparison to the U.S., where Fedex, UPS, and the U.S. Postal Service provide comprehensive delivery capabilities, delivery infrastructure in Korea is typically fragmented. Coupang has reportedly invested heavily in its fulfillment capabilities, building 100 logistics centers in 30 cities, in addition to hiring 15,000 dedicated delivery drivers. As a result, most of Coupang’s 12 million customers live within seven miles of a fulfillment center, according to Goodwater.
Focus on delivery time and price
And that means the digital commerce company can offer more enhanced service, such as free next-day delivery on most items 365 days a year for orders up to midnight the day before, and delivery within hours for millions of items, according to the company’s own reports.
These features, plus a focus on price–60% of South Korean consumers say products on Coupang are cheaper than elsewhere–can create a virtuous circle with consumers who are attracted to the service, Goodwater’s research suggests. Approximately 45% of the company’s existing customers reportedly shop on the site either several times a week, or every day.
South Korea has a population of 50 million people, in a country with the land mass of Indiana. It is also comparatively wealthy, and the population has more than 90% internet and smartphone penetration rate. (That compares to an average internet and smartphone penetration rate of approximately 82% in the U.S.)
Here’s more research and insight about Coupang, from venture capital firm Goodwater.*
More About IPOs
After an IPO, a new stock can be subject to significant increases or decreases in market price. That’s known as volatility. Stock volatility can be particularly high in the first few months following an IPO and as a result, so can the potential for short-term losses. If you’re in this stock for the long haul though, it could be an opportunity for dollar cost averaging.
Oftentimes, fluctuations in price can be due to the expiration of something called a lockup period—this is when company insiders, such as employees, sign an agreement that prohibits them from selling shares for a specified period of time.
When lockup periods expire, insiders tend to sell their stock in order to realize profit, sometimes causing the stock price to fall, or experience large changes in price in the process.
You can find out more about the lockup period and other information about Coupang by looking at its prospectus, a publicly available document on the Securities and Exchange Commission’s website EDGAR.
Remember the Stash Way—invest for the long-term, invest regularly, and don’t put all of your eggs in one basket.
*The venture capital company Goodwater is an investor in Stash.