Should You Invest in Coupang?

PHOTO CREDIT: Coupang

OVERVIEW

Coupang Incorporation is a company based in South Korea but its stock is listed on US markets. The company operates an e-commerce platform in South Korea and some other international markets as well. It sells apparel, beauty, toys, food, and many other products on its platform. Coupang was founded in 2010.

Why You Should?

  1. Coupang is a great growth play in an investor’s portfolio. The company continues to spend heavily on expanding its business domestically and to some new international markets. If this growth continues, the company will continue to report better revenue results and unlock new growth opportunities.
  2. Coupang is also a large e-commerce company within the massive e-commerce industry. Consumers (especially younger ones), love to shop online. This has caused many brick-and-mortar businesses to go bankrupt and has shifted money to these massive e-commerce companies (like Coupang). The growing e-commerce industry will benefit the company.
  3. New lockdowns and quarantine restrictions caused by the new Delta variant will also benefit the business. Many people will stop shopping in person and would order things from Coupang to stay at home and limit exposure to this new and more contagious variant. As the variant spreads in South Korea and other international markets, it will benefit the company.
  4. Coupang has spent billions of dollars in order to expand its business in South Korea. It has also continued to grow in international markets like Singapore, Japan, and Taiwan. This will benefit the company as they will be able to grow their presence and gain new customers in these markets. This will also benefit investors in the company.
  5. With this international and domestic growth, as well as growth in delivering restaurant orders and groceries, many investors believe that Coupang will be the next large e-commerce company (like Amazon) in South Korea. If the company is able to develop into this, it will be great for investors in the company.

Why You Should Not?

  1. The company faces tough competition in the e-commerce industry. In terms of other investment options, company’s like Amazon, Walmart, Home Depot, and some other international e-commerce company’s might hurt the company and its investors in the future.
  2. Because Coupang is an international company, investors would need to pay attention to the news in South Korea and study the South Korean consumer to realize trends. Geopolitical risks might hurt the company in the future as well.

MY OPINION

I think that Coupang is a great long-term investment due to its position as a good growth play, the rise of the Delta variant, e-commerce growth, its high expectations, as well as its continued focus on growth. However, tough competition and some geopolitical and unique risks might hurt the company and its investors in the future.

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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