Which one would you rather be? The Groupon of Korea or the Amazon of Korea? For one entrepreneur, it was an easy choice…

Coupang, the Amazon of South Korea is coming to the US stock market. On Feb. 12, Coupang filed to go public and will join other global e-commerce giants like Alibaba and JD on the US market.

Amazon over Groupon any day

Founded in 2010 by Harvard dropout Bom Kim, Coupang first started as a daily deals business similar to Groupon. Seeing the opportunity in e-commerce, Kim pivoted the business into an e-commerce marketplace within 3 years and launched Korea’s first 24-hour e-commerce delivery service.

Today, Coupang has become the largest e-commerce company in South Korea — with 70% of the South Korean population within 7miles of a Coupang distribution hub.

COVID accelerated Coupang’s growth in 2020 — with sales up 90% in 2020 compared to 54% in 2019. Here’s a look at Coupang’s impressive growth and decreasing losses…

• Sales of $11.9b in 2020, $6.27b in 2019, and $4.05b in 2018
• Losses of $567m in 2020, $770m in 2019, and $1b in 2018

Is this good enough to become the next Amazon?

If Coupang wants to be like Amazon, it’s got a lot of catching up to do…

• Lack of profitable business units… Coupang is still a highly unprofitable e-commerce business while Amazon’s cloud business generates more than half its profits.
• Lack of international presence… Coupang only operates in South Korea, which is nearly 1/10 of the US e-commerce market.

Unlike Amazon, which expanded internationally in 1998 into the UK and Germany, the global e-commerce market is much more competitive today.

Even at Amazon’s scale, it’s still not the world’s largest e-commerce player… According to a report by Activate Consulting, 55% of global e-commerce is dominated by 5 companies:

• AlibabaBABA
  — 29%, AmazonAMZN
  — 13% , JDJD
  — 9% and PinduoduoPDD
  — 4%

Most established countries have a dominant e-commerce player and expanding beyond South Korea would be difficult and expensive.

For investors… More e-commerce IPOs in 2021

Despite its challenges, the South Korean market is still the 7th largest e-commerce market in the world and is expected to continue to grow 60% over the next 3 years.

Several other e-commerce companies like Squarespace and Instacart are expected to go public this year. Coupang, which is expected to go public as soon as March, will set the tone for the demand of e-commerce IPOs.