Add the Amazon of South Korea to Your Watchlist

How many cardboard boxes have landed on your porch in the last month?

For many Americans, between Christmas presents and their regular Amazon (AMZN) deliveries, the number is high. After all, Amazon delivers over 600 million packages a year. That’s a lot of cardboard.

Things are a little different in South Korea. The country’s ecommerce powerhouse, Coupang (CPNG), offers all the perks Amazon does, like free delivery. But it takes a “zero packaging” approach, with 75% of deliveries arriving in reusable packages.

Over time, those savings add up.

  • It’s one of the many reasons Coupang is growing like a weed…

Last week, we talked about the risks of owning Chinese stocks, like ecommerce giant Alibaba (BABA). I mentioned I liked a similar company, based in business-friendly South Korea, much better.

Well, that company is Coupang, which CEO Bom Kim founded in 2010.

By 2019, Coupang had captured 5% of South Korea’s $128 billion in ecommerce sales. Industry experts expect the country’s ecommerce sales to shoot to $206 billion by 2024. That’s a 10% annual compounded growth rate. Meaning Coupang would keep growing at a rapid clip simply by holding onto the market share it already has. But I expect it to do more than that.

As you can see in the chart below, Coupang’s total sales jumped 55% in 2019. And they jumped 91% in 2020, reaching $12 billion.

Looking out to 2024, I think Coupang could do $36 billion in sales. That would push its share of South Korea’s ecommerce market up to 17%. And it would still have plenty of room to grow. (For perspective, eMarketer expects Amazon to rake in 41% of all US ecommerce sales this year.)