Coupang SWOT and PESTLE Analysis

Strength

1. Largest e-commerce player in Korea: Coupang is South Korea’s leading e-commerce company with their USP being low prices and same day delivery. They operate an end-to-end integrated system using technology to ensure superior consumer experience and excellent merchant solutions. Even during the pandemic, Coupang saw its sales spiral by 50% due to increased demand for e-commerce services due to lockdowns. In 2020, Coupang was the largest private sector job creator in Korea and they added more than 25,000 new jobs which was more than the other 500 largest Korean companies combined. Their operational network is widespread and 70% of the South Korean population lives within 7 miles of a Coupang logistics centre. In other words, Coupang’s operations span over 25 million square feet in over 30 cities. Coupang’s B2C logistics footprint is the biggest among all other Korean e-commerce players. In 2020, their net revenues increased to $12 billion, up 90.8% compared to 2019. Coupang’s gross profit increased and stood at $2 billion, increasing by 92.3% compared to 2019.

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Weakness

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Opportunity

1. Expand operations to capture markets outside Seoul: Coupang recently ventured outside the Korean market for the first time to start operations in Japan. This ecommerce venture is starting its Japanese operations through its delivery service under the backing of its investor Softbank. The venture seems promising for Coupang which has seen immense success in the e-commerce sector of Korea. They also raised funds worth $4.6 billion in their New York Stock Exchange IPO in 2021. Japan has a tech-savvy and digital consumer base who has greatly adapted to the era of e-commerce. Coupangcan capitalize on this opportunity to make profits while strengthening its global footprint. Coupang plans to bring its Rocket Delivery system to Japan soon. The company also plans to start operations in Singapore and Malaysia in the latter half of 2021. These South East Asia focused business plans will help Coupang increase its global footprint while dealing with consumer behavior that is not starkly different from what they were used to in Korea.

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Threat

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Political

. Digitalization programs by governments to protect small businesses : The COVID-19 pandemic led to an unprecedented boom in the e-commerce sector. To control the spread of the virus, governments around the world-imposed lockdowns and store closures. Consumers shifted to e-commerce to take their shopping online. Businesses were forced to expand their digital platforms to avoid losing their customers to competitors with better digital infrastructure. E-commerce companies had an advantage as they were already well versed with digital operations. A study by UNTCAD showed that the digital transformation affected global and small local businesses. Some of the adverse economic effects of the pandemic were avoided by this rapid digital transformation. However, not all businesses and geographies responded with the same speed and efficiency. Digitalization led to liquidity problems for some companies who had to invest in new infrastructure and hire employees with more technical skills. Governments around the world started to offer training solutions for small businesses to protect them against large players. The Government of Costa Rica started an online platform for businesses without an online presence and also provided them with an app to facilitate them to trade even without having digital capabilities of their own. Indonesia launched a capacity-building program for small businesses to help them digitalize their operations quickly and with maximum efficiency.Coupang can capitalize on this digital explosion to reap rich profits.

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Economic

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Social

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Technological

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Legal

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Environmental

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