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- 📦 Coupang Inc. – A Deep Dive into South Korea’s E-Commerce Leader
📦 Coupang Inc. – A Deep Dive into South Korea’s E-Commerce Leader
Stay Informed on APAC Finance & Business — All in less than 5 Minutes.
In today’s issue:
Stock Deep-Dive: Coupang Inc. (NYSE: CPNG)
Donki-mania: Tourists Flock to Japan’s Chaotic Discount Giant
Yulon to Build Mitsubishi EVs for Oceania
And more…
Short Finance & Business updates from APAC:
đźš— Yulon to Build Mitsubishi EVs for Oceania (4 minute read)
Taiwan’s Yulon will manufacture Mitsubishi-branded EVs using Foxtron’s Model B, marking Foxconn’s first EV order. Production at Yulon’s Miaoli plant starts next year, targeting Australia and New Zealand. With capacity to double output, this deal boosts Taiwan’s global EV footprint and Foxconn’s automotive ambitions.taipeitimes.com
🛍️ Donki-mania: Tourists Flock to Japan’s Chaotic Discount Giant (4 minute read)
Japan’s Don Quijote is booming, thanks to inflation-weary locals and souvenir-hungry tourists. With 501 stores in Japan and 110 abroad, Donki’s chaotic charm, low prices, and eclectic mix of products have driven sales 1.7x above pre-pandemic levels — and it’s not slowing down anytime soon. japantimes.co.jp
🚖 Baidu’s Apollo Go expands Hong Kong robotaxi tests (5 minute read)
Baidu’s Apollo Go received an updated pilot license to double its robotaxi fleet and expand testing across Hong Kong. Operating in areas like Cheong Hing Road and Airport Expo Boulevard, this move edges Apollo closer to launching full autonomous taxi services—and supports Baidu’s broader global ambitions in autonomous mobility. scmp.com
🛡️ South Korean Defense Stocks Surge Amid Global Tensions (4 minute read)
Hanwha Aerospace and Hyundai Rotem soared up to 17% as global security concerns and Europe’s rising military budgets spark investor interest. With arms exports hitting $7.3B in 2021 and geopolitical tensions heating up, South Korea is fast cementing its role as a global defense powerhouse. cnbc.com
Stock Deep-Dive: Coupang Inc. (NYSE: CPNG)
Quick Snapshot
Industry: Specialty Retail
Market Cap: $47.2 billion
P/E Ratio: 184
Revenue Growth (YoY): +21%
Recent Price Movement: 15.56% (1 yr change)
Prices as of 09/05/2025
Business Overview & Competitive Advantage
Company Description
Coupang (NYSE: CPNG) is one of the fastest-growing technology and commerce companies globally, positioning itself as a comprehensive ecosystem of retail and digital services. Founded in 2010 by Bom Kim, the company has built an end-to-end integrated system of technology and infrastructure with an innovation-focused culture aimed at continuously elevating customer expectations.
Headquartered in Seoul, South Korea, Coupang has become the country's largest e-commerce player with an estimated 25% market share as of 2024. The company went public in March 2021 in what was at the time one of the largest IPOs by an Asian company on a U.S. exchange since Alibaba. Originally established in Korea, Coupang has expanded into Taiwan and recently acquired Farfetch, a leading global marketplace for luxury fashion, for approximately $500 million in January 2024. The company's mission centers on delivering superior customer experiences at lower costs while redefining retail standards worldwide.
Revenue Sources
Product Commerce (~88% of revenue - FY24): Core marketplace sales of general merchandise, groceries, and daily consumables through first-party inventory and third-party marketplace
Developing Offerings (~12% of revenue - FY24):
Coupang Eats: Restaurant delivery service revenue from commissions and delivery fees
Coupang Play: Streaming media content service including exclusive sporting events like Premier League matches
Advertising: Rapidly growing revenue stream from suppliers and merchants advertising on Coupang's platforms
Coupang Pay: Payment processing services integrated into the app with expansion into broader fintech services
Private Label Brands: Development and sales of Coupang-branded products in partnership with SMEs
International Expansion: Revenue from operations in Taiwan and the luxury fashion market through Farfetch acquisition
Fintech Services: Emerging credit and insurance product offerings
Key Growth Drivers
Coupang's growth strategy leverages several powerful macro and company-specific trends:
E-commerce Penetration: South Korea's e-commerce market is projected to grow at 10% CAGR through 2027, reaching approximately $200 billion, with Coupang positioned to capture a significant portion of this growth
Infrastructure Expansion: Ongoing development of its logistics network with over 100 fulfillment centers across Korea, enabling same-day and dawn delivery capabilities to 70% of the population within hours
Service Diversification: Expansion into adjacent services with significant market potential:
Food delivery market in Korea estimated at $15+ billion
Digital advertising market in Korea expected to reach $7+ billion by 2025
Streaming content market growing at double-digit rates annually
SME Empowerment: Enabling 75%+ of merchants (small and medium-sized enterprises) to reach Coupang's 20+ million active customers
International Expansion: Growth beyond Korea into Taiwan (launched 2021) with a potential addressable market of 24 million consumers, and potential for further geographic expansion into Southeast Asia
Luxury Market Entry: Acquisition of Farfetch provides access to the high-margin global luxury fashion segment, a $300+ billion market growing at 6-8% annually
Cross-border Commerce: "Rocket Overseas" service enabling merchants to reach international customers, tapping into the growing cross-border e-commerce market estimated at $2+ trillion globally
Competitive Moat
Coupang has established several sustainable competitive advantages that differentiate it in the marketplace:
Integrated Logistics Network: Proprietary end-to-end fulfillment infrastructure with over 40,000 delivery drivers and 100+ fulfillment centers spanning 20+ million square feet, enabling unique delivery promises (Dawn Delivery, Same-Day Delivery) that competitors struggle to match
Vertical Integration: Unlike most e-commerce companies, Coupang owns its entire logistics chain from fulfillment centers to last-mile delivery, giving it unparalleled control over costs and customer experience
Ecosystem Approach: Comprehensive suite of services (e-commerce, food delivery, streaming, payments) creating high switching costs for customers, with 22+ million active customers and industry-leading retention rates of 70%+ after 7 years
Customer-Centric Innovation: Consistent focus on removing friction from the customer experience, exemplified by their one-tap return process and industry-leading NPS scores (Net Promoter Score) consistently above 70
WOW Membership Program: Prime-like subscription service with 12+ million members (as of Q1 2024), creating loyalty and increased purchase frequency with members spending 3-4x more annually than non-members
SME Partnerships: Strong relationships with over 75% of merchants being SMEs, creating mutual growth opportunities and a diverse product selection exceeding 500 million SKUs
Unit Economics: Achieved market-leading operational efficiency with significantly lower delivery costs per package compared to competitors
Luxury Segment Integration: Addition of Farfetch provides access to premium customers and exclusive luxury products from 1,400+ luxury brands and boutiques
Profitable Growth: Unlike many e-commerce platforms, Coupang has demonstrated consistent profitability since Q3 2022.
The company's relentless focus on customer satisfaction through its "wow" experience strategy, combined with over $7 billion in cumulative investments in infrastructure and technology, has created a formidable barrier to entry for potential competitors while enabling Coupang to continue expanding its market share across multiple verticals.
Financial Analysis - Fundamentals
Key Financial Metrics
Metric | Value | Industry Average |
Revenue Growth TTM | 21% | 13% |
Net Profit Margin TTM | 1% | 6% |
P/E Ratio TTM | 184 | 58 |
Return on Equity TTM | 5% | 5% |
Debt/Equity Ratio | 93% | 112% |
Prices as of 09/05/2025
Revenue & Profitability Trends
CPNG has demonstrated impressive revenue growth over the past five years, significantly outperforming its e-commerce and technology peers in the Asian market.
Revenue Growth: CPNG has achieved a strong 5-year CAGR of 37% compared to the peer average of 24%. Recent performance remains robust with 21% year-over-year growth, nearly double the peer average of 13%. This indicates CPNG is maintaining momentum in its growth trajectory.
Margin Development: While CPNG's gross margin 5-year average of 22% lags behind its peers' 36%, the company has been working through its scale-up phase. Operating margins have averaged -2% compared to peers' positive 3%, showing CPNG is still investing heavily in growth and infrastructure.
Net Profit Margins: The 5-year average net profit margin of -1% reflects the company's growth-focused strategy, compared to peers' 10% average. This suggests CPNG has prioritized market expansion over immediate profitability.
Cash Flow Performance: CPNG's free cash flow yield has been improving, but at 3% for FY24 (down from 6% the previous year), it remains significantly below the peer average of 44%. This indicates peers are generating substantially more cash relative to their market value.
Financial Strength
CPNG maintains a reasonable financial position compared to its peers (JD, BABA, SE, 035420.KQ, 4755.T), though with some areas that could be strengthened to support continued growth.
Liquidity: With a current ratio of 1.16, CPNG has adequate short-term liquidity, though slightly below the peer average of 1.35. This suggests reasonable ability to cover short-term obligations.
Leverage: CPNG's debt-to-equity ratio stands at 93%, healthier than the peer average of 112%. This indicates a somewhat less leveraged position than competitors, providing flexibility for future financing needs.
Return Metrics: CPNG shows improving profitability with a TTM Return on Equity of 5%, nearly matching the peer average of 5%. This represents a significant turnaround from the 5-year average ROE of -4%.
Long-term Returns: The company's 5-year average ROA of -3% and ROI of -8% reflect its historical investment phase, with peers showing ROA of 1% and ROI of 1%. This suggests CPNG is still in earlier stages of monetizing its substantial investments.
Coupang Q1 2025 Financial Highlights
Consolidated Performance
Net Revenues: $7.9 billion, up 11% YoY (21% on FX-neutral basis)
Gross Profit: $2.3 billion, up 20% YoY (31% on FX-neutral basis)
Gross Profit Margin: 29.3%, improved by 217 basis points YoY
Operating Income: $154 million, up $114 million YoY
Net Income: $114 million
Net Income to Stockholders: $107 million, up $102 million YoY
Diluted EPS: $0.06, an increase of $0.06 over last year
Adjusted EBITDA: $382 million (4.8% margin), up 88 basis points YoY
Cash Flow (Trailing Twelve Months)
Operating Cash Flow: $2.0 billion, decreased $335 million YoY
Free Cash Flow: $1.0 billion, decreased $450 million YoY
Note: Decreases primarily due to non-recurring working capital benefits in prior period
Product Commerce Segment
Net Revenues: $6.9 billion, up 6% YoY (16% on FX-neutral basis)
Active Customers: 23.4 million, growing 9% YoY
Gross Profit: $2.2 billion, up 17% YoY (28% on FX-neutral basis)
Gross Profit Margin: 31.3%, improved by over 300 basis points YoY
Adjusted EBITDA: $550 million, up $83 million YoY (8.0% margin, up 81 basis points YoY)
Developing Offerings Segment (International, Eats, Play, Fintech and Farfetch)
Net Revenues: $1.0 billion, up 67% YoY (78% on FX-neutral basis)
Gross Profit: $165 million, up 77% YoY (87% on FX-neutral basis)
Adjusted EBITDA: -$168 million, improved by $18 million YoY
Capital Allocation Update
Board authorized a stock repurchase program for up to $1 billion of outstanding Class A common stock
Valuation Analysis
As of 02 May 2025, Coupang (NYSE: CPNG) trades at a Price-to-Earnings (P/E) ratio of 184.25, which is significantly higher than the peer group average of 57.60. The peers included in this comparison are JD.com (JD), Alibaba (BABA), Sea Ltd (SE), Naver Corp (035420.KQ), and Rakuten Group (4755.T).
On a Price-to-Sales (P/S) basis, Coupang trades at 1.53x, which is below the peer average of 2.20x, suggesting a lower valuation relative to its revenue base when compared to similar companies in the e-commerce and digital services sector.
Coupang’s Price-to-Cash Flow (P/CF) ratio stands at 23.87, which is above the peer average of 16.49, indicating that investors are currently paying a premium for each dollar of cash flow relative to comparable businesses.
All valuation metrics were sourced from Morningstar as of 09/05/2025.
Valuation Ratios | Company | Industry |
P/E Ratio TTM | 184.25 | 57.60 |
Price to Sales TTM | 1.53 | 2.20 |
Price to Cash Flow (TTM) | 23.87 | 16.49 |
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