Coupang | The copycat strategy
How Coupang mastered the art of imitation to become South Korea's e-commerce giant, earning the name "The Amazon of South-Korea".
If there is only one key point you should take away from this article, it’s this:
Coupang strategically studied companies like Amazon, Alibaba, and JD.com, adopting their best practices while avoiding their missteps. By applying these lessons, Coupang built South Korea’s largest and most successful e-commerce platform, tailored to the unique demands of its local market.
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In the competitive world of e-commerce, Coupang has risen to dominate South Korea. The company achieved this by learning from industry giants and refining their strategies to fit local needs. Let's dive into how Coupang's approach of "copying and improving” paved its path to success.
Learning from the Best
Coupang, often called the “Amazon of South Korea,” is the country’s largest e-commerce platform, known for its ultra-fast Rocket Delivery service, which gets products to customers within 24 hours. Founded in 2010, it has grown rapidly by offering a seamless shopping experience with products ranging from groceries to electronics.
So, what makes Coupang a copycat?
Coupang didn't just imitate—they carefully studied the success stories of major players like Amazon, Alibaba, and JD.com. By adopting the strengths and avoiding the pitfalls of these giants, Coupang developed a service model that perfectly caters to the South Korean market.
The Amazon of South Korea
There’s a reason Coupang has earned the nickname Amazon of South Korea. Here are a few key points:
Being the biggest: Holding a commanding 25% of South Korea's e-commerce market, Coupang is the largest player.
Infrastructure: Like Amazon, Coupang has invested heavily in its own fulfillment centers and logistics network, allowing for faster, more efficient deliveries.
Customer-centric approach: Focused on low prices, quick delivery, and exceptional customer service, Coupang mirrors Amazon's customer-first strategy.
Coupang did more than just copy successful ideas; they enhanced them to fit the needs of their customers.
As you'll see in the paragraphs that follow, Kim, the founder and CEO of Coupang, was a "bit" (yes, that's sarcastic) inspired by Bezos' Amazon strategy.
How do we see this influence? Kim introduced subscriptions into his strategy, such as:
Rocket WOW membership: Much like Amazon Prime, Coupang offers a subscription model that includes free shipping, easy returns, and access to exclusive streaming services. The program grew from 6 million members in 2020 to 14 million in 2023.
Rocket Delivery: Coupang's Rocket Delivery service, which takes its cues from Amazon Prime, guarantees that 99.3% of orders will arrive within 24 hours. Orders placed before midnight? They’ll be at your door by 7 a.m. the next day.
Rocket Fresh, a grocery service (like Instacart or Amazon Fresh).
Coupang Play, a streaming service (like Prime Video).
Coupang Eats, a food delivery service similar to Uber Eats.
Coupang Flex, a flexible work model, combining aspects of Uber and DHL.
Coupang Pay1, their payment service (similar to Google and Apple Pay).
Logistics infrastructure: Coupang operates over 100 fulfillment centers, spanning 4.4 million square meters. This ensures that 70% of South Korea’s population lives within 11 kilometers of a Coupang distribution center—meaning ultra-fast deliveries.
Effortless returns: With the tap of a button in the Coupang app, customers can leave items outside their doors for pickup, making returns as seamless as possible.
Coupang has grown its revenue from $4 billion in 2018 to $27 billion in the last twelve months by adapting and improving on existing models. That’s a CAGR of 41%!
Coupang’s success shows how copying successful founders and companies can work.
By borrowing from proven models, adding local insight, and introducing their own innovations, Coupang has built a business model that dominates the South Korean market.
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* In mid-2020, the company spun off Coupang Pay as a separate subsidiary. By the end of 2020, Coupang Pay had become the second most used payment system in Korea.
Interesting! Rocket Internet employs the same strategy in Southeast Asia