Coupang's new international expansion plan: targeting India's 150 billion market

South Korean e-commerce giant Coupang is planning to enter the Indian market, with Indian officials saying the SoftBank-backed startup has begun engaging with the Indian government.

“We have received an application from the South Korean government, and Coupang has expressed interest in the Indian market ,” the Indian official said , adding that “ conversations with the Coupang delegation are likely to begin next month. ”

If the company, dubbed the "Amazon of Korea," enters the Indian market, it will become a competitor to local platforms Flipkart and Amazon India.

While the two giants have proven their success in the Indian market over the past decade, they face challenges from government-backed ONDC and other e-commerce platforms such as Reliance's JioMart and Tata Digital.

The Indian e-commerce market is growing rapidly and still has great room for development. According to the FIS 2023 Global Payments Report, India's e-commerce market is expected to grow from US$83 billion in 2022 to US$150 billion in 2026.

A report released this month by Indian research firm Bernstein said Flipkart ($23 billion in GMV) and Amazon ($18-20 billion in GMV) lead in terms of size, and together they have captured about 60% of the market. Reliance holds onto third place with $5.7 billion in e-commerce sales, largely due to its attractive fashion brands (Ajio) and JioMart (e-commerce retail).

Coupang 's plan comes a year after the company announced it was shutting down its operations in Japan. The Korea Times reported in March last year that the company announced the decision 21 months after launching its service in Japan.

The decision is said to be made because Japan has a strong convenience store business culture and the country has a much larger elderly population than any other country in the world, many of whom are not unaccustomed to online shopping.

Coupang hopes to expand its market share by taking advantage of India's rising internet penetration and young people's increasing reliance on online shopping .

According to the Internet and Mobile Association of India ( IAMAI) 2022 report "Internet in India", about 346 million Indians are engaged in online transactions, including e-commerce and digital payments. The report estimates that there are 692 million active Internet users in India. This number is expected to reach 900 million by 2025.

Coupang has a service called "Rocket Deliver" using which items ordered before midnight will be delivered the next day . All imported goods purchased on "Rocket Deliver" will be delivered within three days. Coupang's Rocket Wow Logo service is similar to Amazon's Prime. Customers get free delivery and other benefits after paying a subscription fee.

Coupang's annual revenue for the calendar year 2022 was $20.6 billion, up 12% year-over-year. Coupang raised $4.6 billion in the largest U.S. IPO of 2021. The offering was the largest on a U.S. exchange since Uber raised $8.1 billion in 2019. SoftBank became Coupang's largest investor after the listing, with a one-third ownership stake in the company.

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