How did a daily deals site go from start-up to market leader in Korea in less than two years? Bom Kim, CEO and founder of Coupang, explains all
Only 20 years ago, South Korea was considered a ‘developing’ country, but today growth in this country of 60 million is outpacing much of the industrialised world. More than 95 percent of homes have broadband internet – the highest such penetration in the world – and Korea is now the sixth largest e-commerce market globally. It was in this context that Bom Kim launched daily deals site Coupang. Although it was the thirtieth such service to launch in Korea, Kim has taken it to number one in just 18 months. We spoke with Mr. Kim to hear how he and Coupang were able to take the lead in this booming country.
//Think Quarterly: What is the role of Korea’s world-leading broadband penetration in your company’s growth?//
Kim: A couple of factors have made this market extremely hyper-connected. Aside from extensive broadband penetration, Korea has a very dense population, which allows for a very fast physical delivery infrastructure. Typically, deliveries from web purchases take about a day, so Koreans use the internet to fulfill a lot more needs than Americans. In the US, for example, a big screen TV would generally not sell over the internet. It takes two weeks to deliver, so you don’t get that immediate gratification.
//How does this fast delivery infrastructure affect the sort of products and services you’re able to provide?//
Well, our site sells fresh fruit, for example. Think about that happening in the US at a large scale – it’s not likely. This infrastructure in Korea allows local services like fresh fruit to account for around a quarter of our business.
//Aside from infrastructure, what made Korea attractive to you?//
Korea is a dense, dense country. There are 30 million people living in high-density areas where a service like Coupang is most used; there are 40 million people in such areas in the US, so we’re talking about similar market sizes. An interesting fact is that there are 12 restaurants for every 1,000 people in Korea – six times the stat for the US. Consumers are ready to buy.
”We don’t care about being the first to do anything, but we want to be best at responding to the market.”
//How have you taken Coupang to number one in just 18 months?//
It’s really about the people that work here. Korea is an incredibly difficult market to crack, especially for anyone who just sees things from a US cultural perspective. Consumers here are some of the smartest and hardest-working in the world, but they are very much Korean. It’s one of the very few markets where Walmart failed, where Google isn’t number one, where McDonalds isn’t the largest fast-food chain. Our leaders at Coupang understand both the local market and global best practices. We have people with years of experience from McKinsey and, at the same time, lifers from traditional Korean companies. You need that to lead in Korea.
//How do you balance the need to move fast with the need to do things right?//
Being first to market is helpful, but being the first to do anything is not as important as being the best. We don’t care about being the first to do anything, but we want to be best at responding to the market. We think that really knowing what customers want and quickly responding to their problems and desires is far more important.
//What part of your background has most helped you build this business?//
In high-school I was a competitive wrestler – not a good one, by the way – but it stayed with me. Competition is such a big factor here, and part of why we’ve been able to overcome a lot of growth challenges is people with a competitive intensity. I also think of a sports metaphor from playing basketball: ‘On offence, it doesn’t matter if you miss, but there’s no excuse for not playing defence hard.’ That means I make sure we do the basics very well, and that we’re okay with making mistakes when we try new things.