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

The Intrinsic Value Podcast - The Investor’s Podcast Network

The Investor's Podcast Network

Investing, Education, Business

4.6 • 593 Ratings

🗓️ 12 January 2025

⏱️ 59 minutes

🔗️ Recording | iTunes | RSS

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Summary

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. Enjoy ad-free episodes when you subscribe to our Premium Feed. NEW TO THE SHOW? Follow our official social media accounts: X (Twitter) | LinkedIn | Instagram | Facebook | TikTok. Browse through all our episodes (complete with transcripts) here. Try Shawn's favorite tool for picking stock winners and managing our portfolios: TIP Finance. Enjoy exclusive perks from our favorite Apps and Services. Learn how to better start, manage, and grow your business with the best business podcasts. SPONSORS Support our free podcast by supporting our sponsors: TurboTax Airbnb Public Bluehost Connect with Shawn: Twitter | LinkedIn | Email HELP US OUT! Help us reach new listeners by leaving us a rating and review on Spotify! It takes less than 30 seconds and really helps our show grow, which allows us to bring on even better guests for you all! Thank you – we really appreciate it! Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

Transcript

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0:00.0	You're listening to TIP.
0:02.7	On this week's show, I'm covering Ku Pang, ticker C-P-N-G, the so-called Amazon of South Korea.
0:10.5	It's an incredibly impressive company that has fulfillment centers within seven miles of 70% of the country's population,
0:17.8	and accordingly is able to not only fulfill one-day deliveries, but even do what they
0:23.3	call dawn deliveries, where so long as you order before 12 a.m., the product will be on your
0:28.2	doorstep by 7 a.m. There are 22 million households in South Korea and 21 million active
0:35.5	coupang customers with 14 million enrolled in coupang's equivalent
0:39.4	of Amazon Prime, Rocket Wow. Part of what I find interesting about coupang from an investment
0:45.2	perspective is that it's the second biggest holding of the Miller Value Partners Investment Fund,
0:50.8	which is managed by Bill Miller the fourth, who is the son of the legendary investor Bill
0:55.0	Miller.
0:56.0	Normally, that wouldn't move the needle that much to me, but Bill Miller is best known for recognizing
1:00.8	Amazon's advantages early on and investing in the company after its IPO back in 1997,
1:06.9	when it was anything but clear that the company would be a success.
1:10.5	So the fact that his family fund has similar conviction in Ku-Pang is at least what makes
1:14.6	me interested to dig more deeply into the company.
1:17.6	You've probably heard a lot of companies around the world call themselves the Amazon of China,
1:21.6	South America, Africa, India, or Korea.
1:24.6	And that's because the Amazon Playbook is well known. So there are dozens of companies
1:29.1	trying to copy Amazon's model and adapt it to their local markets. Kupang, though, already has
1:34.9	remarkably deep penetration and is ingrained into the fabric of South Korean life, giving it some
1:40.0	serious opportunity to further monetize its existing services in the country and expand on them.
	...

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