The Intrinsic Value Podcast - The Investor’s Podcast Network

TIVP002: Coupang (CPNG): The Amazon of South Korea w/ Shawn O’Malley

9 snips

Jan 12, 2025

Discover the captivating rise of Coupang, known as the 'Amazon of South Korea.' Learn about its remarkable growth, with nearly half the population as active users. The discussion highlights Bom Kim's visionary leadership and innovative logistics, including lightning-fast deliveries. Dive into the company’s luxury e-commerce shift and challenges in Taiwan and Japan. Explore how its cash flow supports valuation and the competition from players like Temu and Alibaba. Will this transformative platform make it to an investment portfolio?

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ANECDOTE

Coupang's Customer-Centric Approach

Bom Kim prioritizes customer satisfaction with easy returns and diverse delivery options.
Coupang's customer-centric approach includes immediate refunds and doorstep returns.

INSIGHT

Coupang's Logistics Advantage

Coupang's logistics network is its core strength, similar to Amazon and JD.com.
AI-powered automation and a vast logistics footprint enable impressive delivery speeds.

INSIGHT

Competition in South Korea

Coupang faces competition from Naver, which utilizes a different logistics model.
Naver partners with existing logistics providers rather than building its own network.

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In today’s episode, Shawn O’Malley (@Shawn_OMalley_) tells the story of Coupang, the “Amazon of South Korea.” Coupang’s Bom Kim is an impressive founder & CEO who has led the company to incredible growth, with almost half of South Korea’s population becoming active customers of Coupang. And Coupang’s overnight delivery actually puts Amazon to shame, while few companies create as much value for customers as Coupang does with its RocketWOW memberships, which are similar to Amazon’s Prime subscriptions.

But how well does this all translate into value for Coupang’s shareholders? In today’s episode, you’ll learn the origin story behind Coupang, how its business model works, why its stock has flopped since IPOing in 2021, how Shawn thinks about its valuation, and whether he wants to add it to The Intrinsic Value Portfolio, plus so much more!

Prefer to watch? Click here to watch this episode on YouTube.

IN THIS EPISODE, YOU’LL LEARN

00:00 - Intro

02:51 - How Coupang captured the hearts — and wallets — of South Koreans

05:06 - Why Bom Kim founded Coupang

22:03 - What’s behind Coupang’s shift into luxury e-commerce

33:11 - Why Coupang is planning to expand more in Taiwan and what went wrong in Japan

38:40 - Which legendary investors have invested in Coupang

40:28 - How a negative cash conversion cycle supports Coupang’s free cash flows

42:34 - In what ways Temu and Alibaba are threatening Coupang

45:53 - How to think about Coupang’s intrinsic valuation

49:41 - Whether Shawn is adding Coupang to The Intrinsic Value Portfolio

And much, much more!

*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.

BOOKS AND RESOURCES

Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Kyle and the other community members.
Sign up for The Intrinsic Value Newsletter.
Coupang’s pitch on the Value Investors Club forum.
Check out Miller Value Partners on Coupang.
Quartr’s breakdown of the Coupang story.
Coupang’s AI-powered fulfillment center.
Check out the books mentioned in the podcast here.
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