Korean e-commerce company Coupang raises $1 billion from SoftBank

Throwing flirty glances, actress Jeon Ji-hyeon says, “I am great at buying.” “I’m not a shopping expert, but I buy clothes in trend, go on a trip, and enjoy hotel spas from time to time,” the actress boasts. This is a TV commercial of Coupang, Korean on-line retailing company. Started as a social commerce site where customers get discount for group purchase in 2010, Coupang has grown into an e-commerce leader with annual trade volume over 2 trillion won (approx. USD 1.8 million) in five years.

Coupang raised USD 1 billion of investment from Masayoshi Son, also known as Son Jeong-ui in his Korean name, founder and CEO of Japanese telecommunication giant SoftBank. This is the largest investment in Korea’s venture history, and the world’s third-largest investment to a start-up after American transportation network company Uber (USD 2.8 billion) and Chinese electronics maker Xiaomi (USD 1.1 billion) over the past year. The Korean online retailer’s value was estimated at 5.5 trillion won (approx. USD 4.95 billion). Although Coupang’s last year sales revenue was around 340 billion won (approx. USD 306 million) with loss of 120 billion won (USD 108 million), the 58-year-old Japanese businessman highly valued the future prospect of the mobile commerce company. Son has earned 60 trillion won by making investment of 20 billion won to Chinese e-commerce giant Alibaba in 2000. Coupang is full of hope that the company would become ‘the second Alibaba.’

Coupang’s founder Kim Bom-seok, 37, graduated from Harvard. Kim’s parents wanted him to be a lawyer, but he created a start-up because ‘it was so much fun to change the world through business management.’ He has created logistics centers across the nation and R&D centers in Silicon Valley in the U.S. and Shanghai in China. Going beyond an on-line retail service company, Coupang pursues to become an innovative business armed with the latest IT technologies. Its ‘Rocket delivery service’ in which Coupang employees deliver goods home has created discord with delivery and logistics companies.

Masayoshi Son, the third generation of Korean-Japanese, was born in a shanty town of Kyushu and has grown up being despised by Japanese for his Korean heritage. Despite such challenges, he became a CEO of the Japan’s largest IT company. Korean woman named Thai Lee has grown her company into America’s biggest woman-owned company. The 56-year-old businesswoman is CEO of SHI, IT software and service provider with annual sales revenue over 6 trillion won. Based on these examples, Koreans’ DNA seems full of creativity and entrepreneurship. I wish 10,000 start-ups are created in Korea to follow the suit of Coupang.

ysshin@donga.com