- Korea's e-commerce industry is perceived to be a red ocean due to global declining birth rates, a highly scattered yet highly competitive industry with low expected margins.
- Coupang's international expansion will prove difficult due to regional market leader's better margins, Coupang's heavy reliance on self-designed fulfillment centers, and patriotism.
- Layoffs across the private and public market and Coupang's already declining growth signals a material recessionary pressure that puts the company's growth story at risk.
- However, Coupang's burn efficiency (FCF/Revenue) is 3x and 5x better than AMZN and SE respectively and is priced 4x and 2.5x lower than AMZN and SE respectively.
- Excessive macro risks (8.3% inflation, rising interest rates, China-Taiwan conflict escalation) suggest a higher risk premium is required to invest in Coupang.
For further details see:
Coupang: There Is More To Its Growth Story Than Meets The Eye