If you haven’t heard of Coupang, you probably will soon. South Korea’s leading online merchant filed for a New York Stock Exchange IPO February 12, with a leaked valuation target of $50 billion. Maybe $50 billion ain’t what it used to be in today’s exuberant climate. But it would still make Coupang a top-25 stock in emerging markets. And with an NYSE ticker that makes it easier for U.S. investors to trade.
Stock pickers will want to be careful around that number. Pre-IPO hype is orchestrated by the experts at SoftBank Vision Fund, which owns 37% of Coupang and seeks to restore its Midas-touch reputation after the WeWork debacle 18 months ago. Coupang also lost almost half a billion dollars last year, for folks who still care about that sort of thing.
But there’s no question that Coupang dominates Korean ecommerce., with Amazon playing a very belated catch-up in partnership with communications power SK Telecom (ticker: SKM) “Coupang is building a competitive fortress in South Korea,” says Asian tech investment guru Jeffrey Towson
It’s not the only one beating the pants off of global giants. From Standard Oil to Starbucks, capitalism’s mega-theme was the triumph of scale over geography. Anti-globalists in some university might grumble, but multinationals generally carried the day. Social media followed the same pattern, the Facebook-Instagram-WhatsApp suite overwhelming most local lookalikes. But e-commerce seems to be different. So may be its explosively disruptive cousin, online finance.
Coupang’s story gives some hints as to why. Online retailing is less and less about the shmatas on sale, and more and more about the delivery logistics. Coupang is miles ahead here with 15,000 drivers guaranteeing free next-day delivery on anything bought before midnight. (JD.com (JD), with the best delivery network in China, also just leaked plans to spin off its logistics unit.) Cultural knowledge matters, too. Coupang Men, as they are known, ride with flowers for female customers and leave items in dedicated plastic containers on the doorstep to save cardboard. Neither practice would likely fly in the U.S., for instance.
Whatever the reasons, local or regional ecommerce players are killing it all over the world. Mercado Libre (MELI) dominates in Brazil. Shopee, the brand name for Singapore-based Sea Ltd (SE) is No. 1 in Indonesia and No. 2 in the Philippines. It’s bested there by Lazada, which is owned by China’s Alibaba (BABA). Russia has Wildberries, Turkey Sahibinden.com, and so on. An important exception is India, where Amazon and Flipkart, a domestic player that Walmart now owns, are in a pitched battle for supremacy.
The bad news is investors have already discovered these local e-heroes. Mercado Libre shares have tripled over the past year, Sea Ltd quintupled. So maybe grabbing Coupang shares while you can isn’t a bad idea.
Justified or not, these companies will increase the weight and prestige of emerging markets over time, and teach the heirs of John D. Rockefeller a lesson.