Its Coupang Eats food delivery business is growing rapidly with management mentioning it being one of the most downloaded apps in Korea in 2021. I see two key ways this can happen: expanding outside the core business and moving into new countries.Īs I mentioned above, Coupang has a lot of new initiatives beyond the core e-commerce website. In order to be a good investment, Coupang will need to grow its top line at a healthy rate for many years. Margin expansion will be vital to Coupang eventually generating sustainable earnings for shareholders. But long term, management expects that metric to reach a range of 27% to 32%. In 2021, gross margin was only 16.0%, down from 16.6% the previous year. Second, investors need to track gross margin and how much it can expand over the next few years. Like with Amazon, pandemic lockdowns have been beneficial to Coupang's business, so when the pandemic eventually ends in the country, Coupang's revenue growth will likely slow down. The country has been very strict when it comes to shutdowns and just experienced a huge wave of cases over the last few months. First, it will be important to see what revenue growth looks like when COVID-19 restrictions end in South Korea. There are two things investors should be tracking in the near term with Coupang. In fact, it now has an estimated 15.7% market share in its home country, up from just 7.4% in 2017.
As you can see, this business is already quite large and growing rapidly. In the fourth quarter of 2021, revenue grew 34% year over year to over $5.1 billion. On top of the basic e-commerce business, the company has multiple avenues for expansion, including advertising, premium video (to be added to the subscription service), Coupang Pay, food delivery, and grocery delivery. Like its North American brethren, Coupang has a premium subscription service called Coupang Wow with about nine million members. In fact, its motto is to "wow" customers with how great the experience is from Coupang's service. It has a broad e-commerce website combined with its own fulfillment, delivery, and logistics network that allows it to offer overnight shipping on the majority of shopping items. What is Coupang?Ĭoupang operates a business very similar to Amazon but in South Korea.