One year after retreating from Japan, Coupang plans to enter the Indian market
Coupang to enter Indian market one year after leaving Japan
BusinessDialogue has learned that on May 28th, Business Standard reported that Korean e-commerce giant Coupang is in talks with the Indian government to enter the Indian e-commerce market.
According to reports, Indian government officials have revealed that they have received an application from the Korean government, in which Coupang expressed interest in entering the Indian market, and talks with the Coupang delegation may begin next month. However, as of now, Coupang has not responded.
BusinessDialogue understands that Japan was once one of Coupang’s overseas expansion targets, but after operating for 21 months, Coupang announced its withdrawal from the Japanese market in March 2022.
Due to the convenience stores being ubiquitous throughout the country, the immediate delivery service “Quick(Q)Commerce” had a difficult start in Japan, and the country has the highest elderly population in the world, many of whom are not accustomed to shopping for groceries online. Even Coupang, with its ultra-fast delivery, hit a wall.
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But in India, it’s different. India has a very young population structure, and the internet penetration rate and e-commerce penetration rate are increasing. According to the “Indian Internet” report released by the Internet and Mobile Association of India (IAMAI) in 2022, India has 692 million active internet users, with about 346 million people engaging in activities such as online shopping and online payments.
The Indian e-commerce market is not yet saturated and has a huge growth potential. According to the FIS 2023 Global Payment Report, India is rapidly becoming a profitable e-commerce market, but the penetration rate is still low. It is expected that by 2026, the size of India’s e-commerce market will grow from $83 billion in 2022 to $150 billion.
However, the Indian market also has many strong competitors. Domestic players Flipkart and Amazon India already occupy nearly 60% of the e-commerce market share, and the government-supported local e-commerce platform ONDC is also growing rapidly.
Coupang has a signature service called RocketDeliver, which delivers orders placed before midnight the next day. All imported goods purchased on Coupang will be delivered within three days through the RocketDirectPurchasing service. The CoupangRocketWowLogo service is similar to Amazon Prime, providing customers with free delivery and other benefits.
In Korea, 70% of local residents live within a 10-minute drive from Coupang’s logistics centers, and 99.6% of Coupang’s orders are delivered within 24 hours. To achieve the same delivery speed in India, Coupang may need to invest a lot of money, time and effort in building logistics-centered hardware facilities.
Coupang’s financial strength is also expected to support its efforts in India. In 2022, Coupang’s annual revenue reached $20.6 billion, a 12% increase from the previous year. In 2021, Coupang conducted one of the largest IPOs in the United States, raising $4.6 billion.
Coupang has also received investments from many well-known investment institutions. SoftBank has become Coupang’s largest investor, holding one-third of its shares; Greenoaks Capital holds 16.6% of its shares; Maverick Holdings holds 6.4% of its shares; Rose Park Advisors holds 5.1% of its shares; BlackRock holds 2.1% of its shares; and CEO Bom Suk Kim owns about 10.2% of its shares.
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