1. Coupang has achieved its first annual profit in 14 years since its inception. Its revenue reached $24.383 billion, equivalent to 32 trillion won, and during the same period, its operating income also exceeded 600 billion won at $473 million, firmly establishing itself as the undisputed leader in the domestic distribution industry.
2. Coupang's performance was so perfect that it caused a sharp rise in the stock price, which had been lackluster until then. Notably, the number of active customers increased by 16% compared to the previous year, and the number of paid membership Rocket Wow members also increased by 27% to 14 million, dispelling concerns about future growth.
3. However, it is noteworthy that many media outlets are once again discussing the crisis theory of Coupang. Despite Coupang securing the top spot after many ups and downs, there is concern that it might soon lose its position to Chinese platforms like AliExpress and Temu.
4. Especially since the news on March 4 that AliExpress is starting to sell fresh food, concerns about Chinese platforms have grown. I thought their limitation was handling products like fresh food due to their focus on overseas direct purchase services, but they have managed to overcome this weakness faster than expected.
5. However, like many previous Coupang crisis theories, recent articles seem to miss the most crucial point. Previous forecasts of Coupang's failure to turn a profit were largely based on the low level of automation in Coupang's logistics centers. However, the actual cause of Coupang's significant losses was its operation of the delivery network through directly employed personnel.
6. As a result, Coupang improved cost efficiency as the volume of deliveries increased. With the leverage in product supply price negotiations based on traffic, Coupang managed to secure a margin and achieve profitability without automated logistics centers. Initially focusing on the wrong core led to entirely incorrect predictions.
7. Articles dealing with current issues regarding Chinese platforms are falling into a similar trap. They completely overlook the real strength of AliExpress and Temu, which is the 'price competitiveness' they gain by selling Chinese manufactured goods directly without going through intermediaries. They are overcoming their relatively slower delivery speed compared to domestic shopping malls with this advantage.
8. The point is that AliExpress and Temu cannot maintain this price advantage for all products. Hence, their growth will inevitably slow down. In fact, the app traffic growth for these two services has also been observed to decelerate recently.
9. Of course, Chinese platforms are aware of these weaknesses and are making continuous efforts to compensate. AliExpress, in particular, announced a logistics and marketing investment plan worth 100 billion won last year. They are actively attracting domestic sellers and pushing for direct entry of large manufacturers.
10. However, expanding product lines and logistics investments doesn't mean AliExpress has gained a competitive edge over Coupang or other domestic platforms. Unless it's Chinese manufactured goods, there's no reason for Coupang, which sells more volume, to be out-negotiated on price. It's impossible for a mere 100 billion won investment to catch up with Coupang's logistics capabilities, which have already received trillions of won in investment.
11. Coupang was able to dominate the distribution market in a short time because the differentiation provided by Rocket Delivery could be transferred with the expansion of product handling and regional expansion. However, even if AliExpress and Temu's territory expands, their essential competitive power of 'ultra-low prices' doesn't necessarily follow. Thus, discussing whether Chinese platforms will surpass Coupang seems premature.
12. Nonetheless, denying the impact of the rise of Chinese platforms on the domestic e-commerce market is not entirely accurate. For smaller platforms already struggling against Coupang, this could indeed pose a threat to survival. It will undoubtedly have some negative impact on Coupang's performance, but there is definitely an exaggerated aspect, so it's worth taking news with a grain of salt.
13. So why are articles about Coupang being threatened by Chinese platforms continuously being released? From the media's perspective, such topics are provocative and sell well. It's not interesting for one company to continuously dominate, so they're striving to create a competitive narrative.
14. From Coupang's perspective, this situation isn't necessarily bad. If there were no potential competitors while it's on the verge of becoming a market-dominant player, it could fall into monopoly controversies. The formation of a threatening atmosphere by AliExpress and Temu is rather welcome, especially since government measures to check Chinese platforms are currently under discussion.
15. Even AliExpress and Temu benefit from the secondary promotional effect. If articles about them continue to emerge as they seriously target the domestic market, it can attract consumer attention and aid in acquiring new users. For this reason, the threat theory of Chinese platforms is likely to persist for a while.
16. So, when can the threat from Chinese platforms be considered real? Currently, Coupang's greatest strength is its preemptive establishment of an extensive logistics infrastructure. To challenge this, an investment of at least several trillion won would be required.
17. Therefore, if news of such significant investment comes from anyone, it might be time to revisit the crisis theory of Coupang seriously.

※ This content was produced in collaboration with Connectors and 'TrendLite'.

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