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Coupang is nicknamed the “Amazon of South Korea,” but its founder, Bom Kim, keeps a much lower profile than Jeff Bezos. The Korean-American chief executive was thrust into the spotlight last week when Coupang made its $4.6 billion debut on the New York Stock Exchange. The 42-year-old is now worth $8.9 billion, per the Bloomberg Billionaires Index.
Bezos, 57, was already one of the richest people in the world when Kim founded Coupang in 2010. After graduating from Harvard University, Kim briefly attended Harvard Business School but dropped out after six months. He moved back to South Korea, convinced that he could pioneer a new e-commerce model.
The bet paid off. Coupang is now the top player in Korean online retail, capturing nearly a quarter of the market in 2020. Coupang makes Amazon look slow, delivering 99% of all orders within one day. Shoppers can get items from cosmetics to groceries delivered by 7 a.m. on orders placed just before midnight.
“Our mission is to create a world where customers wonder, ‘How did I ever live without Coupang?'” Kim told Insider in a recent interview.
This mission echoes Amazon’s mantra of customer obsession. Bezos and Kim can both credit their success to this focus.
Bezos and Kim are ‘customer-obsessed’
“The number one thing that has made us successful, by far, is obsessive-compulsive focus on the customer as opposed to obsession over the competitor,” Bezos said at an Economic Club of Washington event in 2018.
Bezos even goes so far as to leave one seat empty at meetings, telling staff to imagine it’s occupied by the customer.
Kim’s devotion to shoppers led to him putting Coupang’s IPO plans on hold for several years. The company, then an eBay-style marketplace, already topped $1 billion in transactions, but he thought it didn’t offer enough value to customers.
“Bom has a singular obsession with serving the customer that is truly unique and something I’ve appreciated,” says venture capitalist Eric Kim, who met Bom Kim shortly after he dropped out from HBS and served on Coupang’s board from 2011 through 2016. “Coupang’s customer retention rate is on par if not better than Amazon.”
Both prioritize making investments for the future over profits
Last year, Coupang recorded $474.9 million in losses despite revenue nearly doubling to $11.97 billion. Amazon was also unprofitable when it went public in 1997 and didn’t turn a yearly profit until 2003. Both Kim and Bezos emphasize free cash flow – the money left after operating expenses and capital expenditures – over profitability.
“When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows,” Bezos wrote in his first shareholder letter. “We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.”
Coupang identified free cash flow as a “barometer of the current health of the company” in its registration statement with the SEC.
“We will continue to reinvest cash flows generated by our established offerings into new initiatives and innovations for our customers,” states the S-1 filing. “We will choose to invest and maximize value for customers and shareholders in the long term over optimizing our short-term results.”
Kim said his company was the number one job creator in Korea last year, and his plan is to create hundreds of thousands of new jobs after the IPO.
“Now with this investment, we can create 50,000 more jobs in Korea and invest billions of dollars in technology and infrastructure that I think will also indirectly create more opportunity,” said Kim.
Kim thinks Coupang stands apart from Amazon
In an interview with Insider, Kim was quick to brush aside any comparisons to Amazon’s rise in the United States. “When we spoke with investors, we didn’t focus that much on analogies, because I think we’re quite unique in the investment we’ve made,” he said.
To prove his point, he detailed Coupang’s end-to-end integrated online shopping and delivery system with a specific example of an executive on his team who promised his son a rollerblading trip.
“On Friday, he realized that he had forgotten to buy rollerblades, but because we have dawn to dusk delivery, which means you can order as late as midnight and get it before 7 a.m., he ordered rollerblades before he went to bed and it was waiting for him like Christmas morning in front of his door,” Kim said. “He was able to keep his promise to go rollerblading with his son.”
Other Coupang advantages include frictionless returns and zero-waste packaging, meaning items arrive in factory packages, not in a brown Coupang-labeled box.
“I think there are many things that we’ve learned from many companies, including Amazon, and we certainly build on top of things that we’ve seen and been inspired by,” Kim said. “But this has been homegrown from scratch, in-house. We’ve made investments and created experiences that are unique, not just in the Korean market, but globally.”
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