Contents
Introduction
Company History
Company Overview
Industry and Market Analysis
Competitive Analysis
Bull Thesis
Bear Thesis
Bear Thesis Debunked
GGQ Score
Financials
Risks
Valuation
Technicals
Ownership
Concluding Thoughts
1. Introduction
Coupang is South Korea’s largest and most advanced e-commerce and logistics company, a business often dubbed the “Amazon of Korea,” though that comparison undersells its true scope.
Founded in 2010 by Harvard dropout Bom Kim, Coupang has redefined what Korean consumers expect from online shopping. Offering same-day or next-day delivery for millions of products, a vertically integrated logistics network, and an expanding ecosystem across fintech, food delivery, and streaming, Coupang has become deeply embedded in everyday Korean life.
What began as an online retailer is now a:
E-Commerce Leader
Logistics Powerhouse
FinTech Platform
Streaming Service
Delivery Operator
2. Company History
As with most great businesses, I believe knowing the full story gives a much better context of the business it is today. This is a bit of a long one, but I highly suggest reading this as it is a core part of my thesis.
Bom Kim’s Early Ventures
Coupang’s story begins with its founder, Bom Kim. Bom was born in Seoul, South Korea in 1978 but moved to the U.S. as a child, attended Harvard College, and showed entrepreneurial flair early on. At Harvard, he launched Current, a student-run magazine which he sold to Newsweek in 2001. After a stint at BCG and another magazine startup (02138 Magazine) that he sold before the 2008-09 financial crisis, Kim enrolled in Harvard Business School. However, he dropped out after just 6 months to pursue a new business idea.
In 2010, inspired by the booming daily-deals site Groupon, Kim decided to return to Korea to found Coupang. Coupang was a portmanteau of “Coupon” and “Pang” - the Korean word for a sudden burst of surprise.
He raised $2M in a seed round, including backing from none other than Bill Ackman himself. (Bill’s stake would go on to be worth $1.3B at IPO)
Founding of Coupang (2010)
Bom Kim founded Coupang in Seoul in 2010, initially as a daily-deals platform similar to Groupon. The company’s mission was to create a world where the customer would ask: “How did I ever live without Coupang?”
In its first year, Coupang gained rapid traction: by the end of 2010 it reportedly generated about $10M in sales with over 3 million registered customers, leveraging viral bargain offerings and aggressive Facebook advertising. (Bom Kim was one of the first to use Facebook ads in Korea)
*At one point, Coupang showed the average Korean internet user 72 ads per month.
2010-2013: Social Commerce Boom and IPO Plans
By 2011, Coupang was a top player in Korea’s frenzied daily-deals market, achieving a run-rate of $300M in annualised sales by Mid-2011. The business was even cash-flow positive early on, as customers paid upfront for deals. (Coupang took a ~15% commission)
Coupang’s customer base surpassed 5 million by 2011 and it described itself as a “discovery shopping” platform, enticing customers to buy things they didn’t initially know they wanted. Riding this momentum, in 2013, just 3 years after founding, Coupang started preparing for an IPO on the KOSDAQ market.
Despite the early success, Bom Kim grew wary of the daily-deals model’s sustainability. Many customers were bargain-hunters with low loyalty, and merchants began complaining that deal-driven traffic often hurt more than helped as it overwhelmed stores with unprofitable, one-time orders.
Bom realised that selling products and services to highly price-sensitive customers in a gamified way was not creating lasting satisfaction. By late 2013, Coupang’s business was in Bom’s eyes fundamentally flawed.
Bom later recounted having a “moment of clarity” questioning if Coupang was a company that truly mattered to customers. Just weeks before printing the IPO prospectus, Kim made a bold decision: Coupang would cancel its IPO and pivot its business model entirely. This would become one of the most dramatic pivots in Korean startup history. Bom effectively traded short-term exit plans for a long-term vision. This reflects the type of long-term founder-led leadership I value.
2014-2015: Pivot to E-Commerce and “Rocket Delivery”
In early 2014, Bom shifted Coupang from a 3rd party deals marketplace into a full-fledged e-commerce retailer with an integrated logistics network.
He believed this was the only way to achieve a “100x better” customer experience. Coupang had to control the entire process, from inventory procurement to last-mile delivery.
At that time, half of customer complaints were about unreliable shipping when using external couriers. Coupang began building an Amazon-inspired 1P model where it would stock products itself and deliver with its own fleet, ensuring speed and quality throughout the process.
This strategic overhaul required heavy investment. In May 2014, Coupang raised a $100M round led by Sequoia Capital and just months later in Nov 2014, raised another $300M led by Black Rock PE Partners.
The fresh capital allowed Coupang to fund warehouses, delivery infrastructure, and a revamped mobile app. (Mobile had grown to ~80% of traffic by then)
In 2014, Coupang officially launched “Rocket Delivery”, its signature fast-shipping service using an in-house courier network. The company hired and trained delivery employees (dubbed “Rocketmen”) to ensure courteous, ultra-reliable services.
These couriers became well-known for thoughtful touches — for example, avoiding doorbells to not wake babies and leaving handwritten notes for customers. Rocket Delivery guaranteed overnight or next-day delivery nationwide for many items, a revolutionary promise in the Korean market at the time.
Coupang’s bold strategy caught the attention of international investors searching for the “next Amazon”. In June 2015, SoftBank invested $1B in Coupang, providing a huge capital infusion to scale up fulfilment.
2016-2018: Expansion, New Services, and the Path to IPO (again)
By 2016, Coupang had over 3,600 full-time couriers and boasted a 97% customer satisfaction score (NPS) for delivery, a “crazy-high” number and a stark turnaround from the shipping and delivery complaints of the past.
From 2016 to 2018, Coupang rapidly expanded its e-commerce catalogue and warehouse footprint. It evolved into South Korea’s largest online retailer by revenue. By 2018, Coupang’s annual revenue began to near $5B, though heavy investments in logistics infrastructure kept it unprofitable (posting a net loss of ~$600M in 2017).
By late 2018, it operated dozens of fulfilment centers across the country. 70% of Koreans lived within 10 minutes of a Coupang logistics center. The vast Rocket Delivery network could reach most customers on the same-day or next-day for millions of items, with 99.6% of orders delivered within 24 hours.
In Nov 2018, Coupang again raised from SoftBank, this time a massive $2B raise, the largest ever for a Korean startup, which valued Coupang at around $9-10 billion.
The cash injection allowed Coupang to double-down and continue investing in growth: expanding its delivery fleet, opening new warehouses, and developing new verticals.
New Verticals
Around 2017-2018, Coupang began branching into adjacent services to deepen its ecosystem reach. It quietly piloted grocery delivery, which led to the launch of Rocket Fresh in 2019. Rocket Fresh offers overnight dawn delivery of fresh groceries (orders placed by midnight arrive before 7AM), catering to Korea’s high-demand grocery market.
Coupang also began allowing 3P merchants to sell on its platform more extensively (returning to a marketplace element, but integrated with Coupang’s logistics). By fulfilling 3P items through its network, Coupang could ensure marketplace orders were also delivered via Rocket Delivery, maintaining the speed and quality.
Additionally, Coupang also invested in its payment capabilities, spinning off a FinTech arm, Coupang Pay in 2019 to handle its growing volume of transactions. These years set the stage for Coupang to present itself not just as an e-tailer but also as a tech platform with its own logistics, FinTech and marketplace ecosystem.
In 2019, Coupang entered the food delivery arena by launching Coupang Eats. Starting in Seoul’s affluent districts, Coupang Eats leveraged the company’s delivery expertise and customer base to compete with incumbents like Baedal Minjok and Yogiyo.
It offered a “single-order, single-delivery” model to ensure faster deliveries, and also because it didn’t have the volume of numbers of the incumbents. This, however, proved to be a huge advantage. Coupang attained ~17% market share of the food delivery market by 2020.
At roughly the same time, Coupang rolled out Rocket WOW, a subscription program akin to Amazon Prime. For a monthly fee, Rocket WOW members received unlimited free Rocket Delivery, access to Rocket Fresh grocery deliveries, among other perks. This gave a huge boost to customer retention and average spend. By bundling its services, Coupang built a loyalty loop to lock in its growing user base of millions of active customers.
In late 2020, Coupang expanded into content streaming with the launch of Coupang Play, an OTT (over-the-top) video service. To jump-start this, Coupang acquired the assets of Singapore-based streaming provider Hooq. Coupang Play went live in December 2020, offering movies, series, and eventually live sports to Rocket WOW subscribers at no extra cost.
IPO Preparations
As these new businesses grew, Coupang began preparing for an IPO (again). In 2020, it filed for a U.S. IPO and brought on seasoned executives, for instance Gaurav Anand (an Amazon veteran) was appointed CFO.
2021: IPO on NYSE and International Expansion
Coupang went public on the NYSE on March 11, 2021, marking the largest IPO in the U.S. that year. The IPO priced at $35 per share, raised about $4.6B for the company. On its debut, Coupang stock opened at $63.50, briefly valuing the company at around $109B market capitalisation.
At the time of its IPO, Coupang’s dominance in South Korea was clear. It was the number one online retailer with a commanding market share of between 38-40%. Its nearest rivals included traditional retailers expanding online (SSG.com, Lotte On), tech platforms like Naver, and smaller e-commerce firms such as Gmarket, 11st, WeMakePrice etc…
Shortly after its IPO, Coupang tentatively ventured abroad for the first time. In June 2021, it launched in Japan, choosing a limited rollout in Tokyo. Rather than a full marketplace, Coupang Japan operated a quick-commerce pilot (branded “Rocket Now”) delivering daily necessities, food, and household items in select Tokyo neighbourhoods. It partnered with local stores such as Takashimaya and Daiso to offer about 5,000 items for fast delivery.
A month later, in July 2021, Coupang also launched in Taiwan. It began testing app-based orders of food, beverages, and daily essentials with on-demand delivery from 8am-11pm. Like in Japan, Coupang Taiwan initially fulfilled orders directly from its own micro-warehouses and couriers, charging a small delivery fee. These expansions were cautious, essentially extended pilots to gauge international potential.
2022-2023: Post-IPO Challenges and Milestones
After the IPO cash influx, Coupang’s leadership signalled a shift from breakneck expansion toward improving margins and profitability. Coupang had long been criticised for its heavy losses, but that began to change in 2022.
Through operational efficiencies and scaling of newer businesses, Coupang turned profitable on a quarterly basis in late 2022. By 2023, Coupang was on track to record its full-year profit, a decade after its major pivot.
In contrast to its domestic strength, Coupang’s overseas experiments saw mixed results. After about 21 months of trial operations, Coupang decided to withdraw from the Japanese market. The pilot in Japan faced high operational costs and failed to meet Coupang’s internal benchmarks. Consistent with Coupang’s cautious approach to expansion, it chose to cut losses rather than sink more capital.
In Taiwan, the 2021 pilot was expanded, with Coupang introducing next-day delivery services in Taipei in 2022/2023. Taiwan thus became Coupang’s primary international foray as of 2023.
Farfetch Acquisition
In a bold move outside its usual geography, Coupang announced in December 2023 that it would acquire the business and assets of Farfetch, a major London-based online luxury fashion marketplace. The deal, structured with a $500M investment with partner Greenoaks Capital, positioned Coupang as a global player in the $400B personal luxury goods market.
Unsurprisingly, Coupang was conservative in its purchase of Farfetch, paying just a 0.10x P/GMV ratio. For context, similar acquisitions by Etsy for Depop, Reverb and Elo7 were priced between 1.13x to 6.78x P/GMV.
3. Company Overview
Coupang operates several business lines. For the sake of brevity, we will focus on just 6 key business segments:
E-Commerce
Logistics
Rocket WOW
Coupang Eats
Coupang Pay
Coupang Play
E-Commerce:
Coupang’s e-commerce platform is the backbone of the business and the foundation upon which all other segments are built.
Coupang began by offering a 1P model, holding stock in its own fulfilment centers, but has since transitioned to a hybrid 1P + 3P model.
With a wide selection of goods ranging from daily essentials to electronics, Coupang has captured over 25% of South Korea’s e-commerce market.
However, what sets Coupang apart from competitors isn’t just its product range. Rather, it is the speed, reliability and user experience.
More on this later in “Competitive Analysis”
Logistics:
Behind Coupang’s superior shopping experience is a logistics operation built to dominate. While others outsource logistics to 3rd parties, Coupang has focused on owning and operating the full stack, from warehouse to doorstep.
It is precisely this that has made it the only true vertically integrated logistics network in South Korean e-commerce.
In 2025, Coupang is investing $2.3B to further expand its already leading logistics infrastructure.
Rocket WOW:
Rocket WOW is Coupang’s subscription membership program, similar to Amazon Prime. It is one of the most successful retention tools Coupang has deployed, and a growing profit center.
There was an estimated 15 million Rocket WOW members at the end of 2024, making up ~30% of South Korea’s population.
Perhaps the most impressive fact about Rocket WOW was the 58% price increase in 2024. Despite this, Rocket WOW member count continued to increase from 14 million in 2023 to 15 million in 2024. This is pricing power at its finest.
Coupang Eats:
While a late entrant, it has quickly captured meaningful market share due to its unique single-rider dispatch model.
Coupang has integrated Coupang Eats with Rocket WOW membership, allowing free deliveries and discounts for members.
In addition, Coupang Eats has also integrated with Coupang Logistics, with riders often delivering both parcels and food during peak overlap times.
In 2024, Coupang Eats’ market share doubled to 35.3% while Baedal Minjok’s share fell by 13.5% to 57.6%.
Coupang Pay:
Digital wallet and payments solution integrated into the Coupang app.
Among various features are 1-click checkout within Coupang, stored value and payment management, integrated with Coupang Card (co-branded credit card), and support for QR payments in offline partner stores.
Coupang Pay serves 3 main functions:
Boost conversion rates on Coupang’s platform
Collect transaction-level data for credit and fraud risk modelling.
Lay the groundwork for embedded financial services such as BNPL, consumer credit and working capital loans for merchants.
Coupang Pay has over 10 million users. With rising transaction volumes, this could be a business akin to Alipay or Amazon Pay.
Coupang Play:
Coupang’s OTT (Over-The-Top) video streaming service.
Still loss-making, but it is viewed internally as a strategic asset rather than a standalone business. Specifically, this is used as an add-on to the Rocket WOW benefits and to increase membership retention.
Coupang Play competes with Netflix, Wayve, Tving, Disney+ etc. Its bundling within WOW gives it a unique cost advantage and makes it more of a feature than a destination, a similar strategy to Amazon Prime Video.
4. Industry and Market Analysis
Macroeconomic Context
South Korea is one of the most advanced e-commerce markets globally with >95% internet penetration, 91% smartphone penetration and ~32% e-commerce penetration rate, top 3 globally.
This environment heavily favours vertically integrated, logistics-first platforms, Coupang’s core strength.
Market Positioning of Coupang
E-Commerce
Coupang remains #1 in mobile GMV with its main competitors being Naver, SSG.com, Gmarket, 11st.
More on Naver and SSG.com later.
Logistics
Coupang remains the only full stack operator at scale with other logistics competitors being CJ Logistics and Korea Post.
Food Delivery
Coupang is 2nd place in Food Delivery with Baemin, the top dog in the industry. (35% vs. 57%)
However, Coupang has gained market share consistently since its entry and will be gunning for 1st.
Digital Wallets
Coupang Pay is largely integrated only within Coupang, and while it has gained traction within the app, is not a top player in the digital wallet space.
The key competitors are Naver Pay and Kakao Pay.
Naver holds a ~20% market share among digital wallets with Naver Pay being widely used for online transactions.
Leveraging the popularity of KakaoTalk (WhatsApp of South Korea), KakaoPay offers seamless payment solutions integrated into the app.
OTT Streaming
South Korea’s OTT market is highly competitive, with both domestic and international players vying for viewership.
Key Competitors include:
Netflix: Significant investments in original Korean content such as Squid Game etc.
TVING: Domestic platform offering a variety of Korean dramas and entertainment shows.
Wavve: Mix of live TV and on-demand content, catering to a broad audience.
Disney+: Similar strategy to Netflix but at a smaller scale.
International Expansion Outlook
Taiwan:
Logistics-led expansion is underway.
Coupang is replicating Korea’s model: fast delivery + curated inventory
There is no clear dominant local e-commerce/logistics platform, which provides a strong entry point for Coupang.
Southeast Asia:
Dominated by Shopee and TikTok Shop now.
Shopee has its proprietary logistics network that is a major player now, Coupang will likely avoid this region.
5. Competitive Analysis
Coupang has broken down its revenues into 2 main segments: Product Commerce and Developing Offerings.
Product Commerce refers to Coupang’s core e-commerce business that makes up 85-90% of Coupang’s revenues and includes both its 1P Retail and 3P Marketplace businesses, as well as its core product: the Rocket WOW membership.
Therefore, considering Coupang’s market positioning and dominance of the e-commerce business, I will be focusing on just the e-commerce segment for this part of the article.
Main Competitors:
Naver Shopping:
Naver is South Korea’s leading search engine. Naver has utilised that advantage to integrate e-commerce functionalities directly onto its search platform, allowing users to compare prices, read reviews, and make purchases seamlessly.
Naver Shopping is the 2nd largest player in the e-commerce market with ~23% market share, closely trailing Coupang. Naver Shopping operates an entirely 3P model, a model that Coupang is increasingly adopting.
Its key strengths include the integration of search and shopping which keeps users within the Naver ecosystem. As the dominant search engine, Naver leverages its brand to drive e-commerce traffic.
However, Naver relies heavily on 3rd party logistics providers, which Coupang has an upper hand on, with full control from supply to delivery.
SSG.com:
SSG.com is the online shopping platform of Shinsegae Group, a prominent Korean conglomerate with a strong presence in retail, food and beverages, hospitality, fashion etc. Shinsegae also owns Gmarket, another online marketplace after acquiring eBay Korea.
SSG.com leverages Shinsegae’s extensive physical store network to integrate both online and offline retail experiences. Its key strengths includes exclusive brand partnerships with premium brands and leveraging its physical stores for logistics and customer service.
Combined, SSG.com & Gmarket own ~11% of the e-commerce market in SK.
11st (11Street):
11st is operated by SK Planet, a subsidiary of SK Group, the 2nd largest conglomerate in South Korea, behind Samsung.
It runs a comprehensive online marketplace offering a wide array of products, emphasising user-friendly interfaces and diverse product offerings. Impressively, 11st partnered with Amazon in 2021. However, it does not appear that the partnership has been a game-changer.
11st leverages SK Telecom’s services and customer base for potential synergies but in general is a smaller player in the market with ~4% share.
Chinese Players (Temu and AliExpress)
Temu and AliExpress are undoubtedly a risk to Coupang’s business.
Both players offer goods at rock-bottom prices, often undercutting Coupang on commodity items such as electronics accessories, household tools, toys etc… For price-sensitive customers, these platforms are attractive.
South Korea allows small-value imports (under 150,000 KRW / USD 108) to bypass duties and VAT. This loophole allows Temu and AliExpress to flood the market with tax-free goods.
They often heavily subsidise logistics and prices with users being lured by deals, cashbacks, gamification etc…
However, Coupang’s edge in logistics, returns and quality is hard to replicate. My belief is that Temu/AliExpress will cannibalise the sales of the likes of SSG.com and 11st over Coupang/Naver, in a similar way to how TikTok Shop has eaten up Lazada and Tokopedia in Southeast Asia, while Shopee continues to gain share.
In summary, Coupang’s main threat for e-commerce is Naver Shopping. However, Coupang’s superior logistics infrastructure provides a structural advantage over Naver Shopping, and should lead to them continually gaining market share in the years to come. Temu/AliExpress are legitimate competitors that Coupang will have to keep an eye on, but I generally view to be a limited risk at the moment.
6. Bull Thesis
Full-Stack Logistics is a Structural Moat
Coupang’s structural advantage in e-commerce through its full-stack logistics network make it difficult for competitors to overtake them.
Coupang is the largest player by GMV and orders, with 99.6% delivery of orders within 24 hours. Yet, Coupang continues to invest in its logistics network, with a $133M logistics center being built and another $69M logistics center targeted to open in 2026.
Coupang is at the Inflection Point of Profitability
One of the key factors for me buying a business is the inflection point between profitability. This is especially so for a business like Coupang where years of investment dollars have been poured into the business, creating sustainable moats that will result in a significant uplift in margins in the coming years.
Revenue growth may plateau between 10-20% in the coming years, but with the possibility of margin expansion, Earnings growth may actually be growing 50% higher or more than Revenue, which could lead to a significant re-rating of the stock.
Rocket WOW: Coupang’s Ecosystem Flywheel
Rocket WOW bundles together free shipping, free returns, Coupang Play, Coupang Eats, among other services that makes it a no-brainer for consumers.
Despite a 58% increase in membership pricing, Rocket WOW continues to retain existing members and added an additional 1M members in 2024, bringing its total count to 15M. This layered ecosystem increases user stickiness, frequency and average order value, contributing significantly to Coupang’s flywheel.
Ads Business with Amazon-like Margins
Coupang’s ad business is still in its infancy, but is following Amazon’s high-margin path. In 2024 alone, Amazon generated $47B in ads at >75% margins.
With Coupang’s retail media platform beginning to scale and leveraging massive purchase intent and proprietary first party data, this could become a multi-billion dollar high margin segment in 2-3 years, contributing meaningfully to Coupang’s bottom-line.
3P Shift Unlocks Margin Expansion
Coupang has increasingly been shifting to a 3P mix, reducing inventory risk while increasing SKU count and platform monetisation. According to data from Tegus, the shift from 1P to 3P will result in profit per basket sale increasing from 18% to 20.8%.
In a low-margin business like e-commerce, a nearly 3% increase in bottom-line makes a massive difference. This will continue to improve Coupang’s cash flows and margins without compromising on its delivery speed.
Cross-Border Expansion with Disciplined Capital Allocation
Cross-Border expansion to Taiwan is a growth lever for Coupang. More importantly, Coupang management is conservative, meaning a decision to increase investment in Taiwan bodes well for future prospects. For instance, management decided to cut losses in Japan after less than 2 years, avoiding sinking more money.
The high-density and high smartphone penetration environment, coupled with a relative lack of strong competition could provide strong growth for Coupang and show proof of model exportability beyond SK.
Farfetch Acquisition Unlocks Luxury and Global GMV
The $500M acquisition of Farfetch brings Coupang into global luxury fashion. It also builds on its own WOW Luxury and Rocket Delivery in high-margin categories. This could provide long-term value and improve margins by integrating its logistics network with global high-ticket GMV products.
7. Bear Thesis
South Korea’s E-Commerce TAM may be nearing Saturation
Coupang’s core market, South Korea is already one of the most developed and saturated e-commerce markets globally.
As of 2025, e-commerce penetration is expected to exceed 35% of total retail, making further market share or category expansion increasingly difficult. SK also has low population growth rates and aging demographics that further limits the upside from increasing order volume organically.
Regulatory and Labour Risk in Logistics
Coupang’s moat is built around its vertically integrated logistics network, a major cost center and employment hub. However, this also exposes the company to regulatory scrutiny, union pressures, and potential cost shocks.
For instance, South Korea’s Ministry of Labour have previously raised concerns about working conditions, especially for warehouse and delivery workers. Coupang has also faced public backlash over warehouse-related death and intense working hours in peak seasons.
Overall Revenue Growth has slowed + Lack of Markets for Expansion
Coupang’s top-line growth has decelerated significantly from 90% growth in 2020 to just 20% in 2024. Compounding this concern is the absence of new high-potential markets outside Korea.
Expansion into Japan failed due to entrenched incumbents and difficulty in scaling. Southeast Asia is already dominated by Shopee and TikTok Shop, while Coupang lacks the brand equity, logistics infrastructure to operate in these regions.
8. Bear Thesis Debunked
Coupang is Still Gaining Share & Expanding the Market
Coupang continues to outpace the industry in GMV growth and order growth. Its full-stack logistics moat will allow it to win share from fragmented offline and online competitors. In particular, offline retail is still an extremely large market, with Coupang’s GMVs making up <5% of the overall market.
Additionally, Coupang’s other categories such as groceries, premium luxury goods are expanding the addressable TAM. These are historically underserved by legacy incumbents.
Paid membership growth through Rocket WOW drives membership stickiness and cross-category purchasing. This can lead to higher ARPU even in a flat population environment.
Coupang is Pre-emptively Managing Labour Relations
Coupang has made over $100M in safety upgrades, including wearable tech, automation in fulfilment and ventilation/cooling systems.
Unlike gig-based platforms, Coupang employs most warehouse workers and delivery drivers as full-time staff, with benefits, making it more insulated from future gig worker reclassification risks.
Even as labour costs rise, Coupang’s automation and scale in logistics provides a long-term cost advantage, buffering margin compression.
Coupang has Multiple Growth Vectors that are Still Under-appreciated
Advertising and FinTech are early-stage, high-margin businesses that Coupang has full autonomy over. This, in my view, has not been priced in.
The membership fee hike of 58% with low churn proves strong pricing power and potential for margin uplift in future for Coupang.
In Taiwan, Coupang is leveraging learnings from Korea and avoiding upfront infrastructure investment. Progress is slower, but capital-light, which will soften margin pressures.
Coupang Eats is gaining ground on Baemin in several regions and we should see this segment grow into a highly-profitable business in the coming 1-2 years.
9. GGQ (GabGrowth Quality) Score
As some of you may know, this is one of the tools I utilise in stock-picking. You can view my full methodology here.
I have combined a variety of the key metrics that I have observed in successful businesses and created a quality score. These include a mix of scores on management, business quality, moats, and potential growth among other factors.
Coupang scored 17/20, which puts it squarely in the “Best-in-Class” category.
In a future post, I will run through each metric and how Coupang scored on each.
10. Financials
Coupang has had a revenue CAGR of ~40% from 2018 to 2024. It hasn’t all been smooth-sailing though, with Coupang seeing a massive deceleration in revenues from 2020 to 2022 as the post-COVID reality hit.
This was not an uncommon sight, with the likes of Amazon, Mercado Libre, Sea Limited seeing similar decelerations in growth owing to a pull forward in growth in 2020.
More importantly, Coupang has seen a re-acceleration in revenue growth, with 24.1% YoY growth in 2024, impressive numbers for a business that brought in $30B in revenues.
Coupang has also seen huge margin expansion during this period with Gross Profit margins nearly 6x-ing in the 7 year period between 2018 to 2024.
Operating Profit margins have shifted from -26% to +1.9% despite Coupang not being focused on profitability at all costs yet.
On the cash side of things, Coupang has a very healthy $5.8B in cash and short term investments, coupled with over $1B in free cash flow per year.
Management has also approved a $1B stock buyback program, which is in itself a reflection of confidence in the company’s long-term prospects and the likelihood that the business will have relatively low share dilution.
11. Risks
As with every business, there will be risks. While some have been discussed in the bear thesis, I will run through a few risks that have yet to be.
Market Concentration Risk
Over 90% of Coupang’s revenues still come from South Korea. The company is highly dependent on the economic health, consumer trends, and regulatory environment of a single market.
North Korea is a singular existential risk-factor, albeit small.
Execution Risk
Eats, Play, and Pay are still unproven. While these are verticals that have huge potential, they are also capital intensive segments. Monetisation may take longer than expected which could be a drag on profitability of the overall group.
FX Risk
Coupang reports in USD but earns revenue in KRW, exposing it to currency conversion risk.
In Q1 2025, Coupang reported 21% growth YoY on a constant-currency basis but just a 11% growth in USD-reported numbers. This could result in a drag on the stock.
12. Valuation
Coupang trades at an Enterprise Value of ~$49B as of this post. For a business like Coupang that is now FCF positive, I prefer to use a Discounted Cash Flow method for valuation.
My take on valuation in general is “Garbage In, Garbage Out”. The total lack of knowledge on terminal margins and the huge number of variables, make it extremely difficult to value a business like Coupang. But I will try.
Coupang has a 3.3% FCF margin today. In my view, a business like Coupang is highly capable of hitting at least a 7-10% FCF margin in 5-10 years, especially with the shift from a 1P to 3P marketplace. To be conservative, I will assume terminal FCF margins of just 7%.
To meet 7% terminal FCF margins, FCF growth will likely grow at much higher rates for the first 10 years.
Based on these conservative estimates, we arrive at a ~4.42% discount to the intrinsic value. I am not expecting this to be a heavily undervalued stock but rather a steady compounder over the next 10 years.
13. Technicals
Coupang stock has recently broken out of a 3 year consolidation phase and I believe has a good set-up for a run towards all-time highs within the next 1-2 years.
This is a similar set-up to Robinhood that has been on a tear since its breakout.
14. Ownership
CEO Bom Kim remains central to the story here and he is well-aligned with shareholders, himself owning 8.7% of the shares. Coupang remains the overwhelming proportion of his total wealth and shows significant skin in the game.
One of the core pillars of my investment philosophy is a strong preference for founder-led businesses, particularly those where the founder remains deeply involved in the company’s mission and execution. Bom Kim embodies this to the tee.
His leadership is vital to the story here, from rebuilding Coupang’s business model, to building a logistics moat and adapting quickly when expansion in Japan failed, Bom’s relentless execution increases my confidence that Coupang will continue to evolve and compound over time.
Interestingly, Stan Druckenmiller, one of the investing greats I look up to, has Coupang as his 3rd largest position, making up 6%+ of his portfolio. While this ultimately has no impact on my investment decision, it is good to see confluence in decision-making.
15. Concluding Thoughts
Coupang is no longer just the "Amazon of Korea". Today, it is a vertically integrated ecosystem uniquely adapted to South Korea’s infrastructure, consumer habits, and density. With full control over its logistics stack, a fast-scaling 3P marketplace, a sticky subscription model in Rocket WOW, and early but promising traction in FinTech, ads, and streaming, Coupang is evolving into a multi-faceted platform with multiple monetisation levers.
While South Korea’s e-commerce market may be maturing, Coupang is still gaining share and expanding TAM through new verticals like luxury, fresh groceries, and financial services. The company’s laser focus on operational efficiency has translated into real margin improvements and a clear path to long-term profitability.
Yes, there are risks: high geographic concentration, regulatory scrutiny, and the challenge of scaling unproven segments like Coupang Eats or Play. But these are balanced by disciplined execution, founder-led leadership, and a demonstrated ability to adapt, pivot, (even at the most unlikely point, weeks before an IPO) and win.
Coupang today trades near intrinsic value based on conservative assumptions. This is not a deep-value opportunity, but rather investing in a high-quality compounder at a fair price. Coupang will enter my portfolio as one of the mid-conviction positions with a view of adding to the position in the coming quarters.
Disclaimer: I am long Coupang. The content presented in this thesis is for informational and academic purposes only and does not constitute financial advice. The analysis and opinions expressed are based on research and should not be interpreted as a recommendation to buy, sell, or hold any security. Readers should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions.