SoftBank, a Japanese Internet corporation, recently invested $1 billion in Korean e-commerce firm Coupang, a local e-commerce leading company, making 350 billion won in annual sales.
Masayoshi Son, chairman of the Japanese firm, who is putting great future value on the Korean company, said, “The company will back Coupang to be more innovative in its e-commerce business. We will continue to invest in Internet firms globally and support innovative companies to grow together.”
Nihon Keizai Shimbun, one of the largest media corporations in Japan, recently reported three grounds behind the investment: Korea’s double-digit growth in the e-commerce market, which currently stands at around 50 trillion won; the rapid growth of Coupang, which reaches 25 million downloads; the investment from one of the America’s largest venture capitals Sequoia.
Some market watchers say the Japanese Internet heavyweight chose Coupang to make it testbed in the global e-commerce market.
“In the global e-commerce market, overseas direct purchasing is becoming a key trend. With the delivery time and quality becoming more important, the firm may want to test Coupang’s rocket delivery and to apply it globally,” one local analyst said.
Coupang’s started its “rocket delivery” last year. Instead of signing contracts with delivery companies, they hired 1,000 “Coupang men” to deliver goods with an investment of 150 billion won. After adopting the service, the delivery time has been much shortened and they plan to hire additional 800 Coupang men by next month.
Also, Softbank has paid attention to Coupang’s nationwide distribution system and its technical competitiveness through research and development centers in Silicon Valley, Shanghai and Seattle.
Market watchers say when the investment is completed, the value of Coupang will reach 5.5 trillion won and Softbank will grab a 20 percent stake.
Coupang CEO and founder Kim Beom-seok said, “We are happy to attract an investment from Softbank known for a long-term investor.”
He added, “We are expecting that the investment will speed up the growth of the company through Softbank’s global specialty and network. This will also be helpful to improve Coupang’s financial competitiveness and to expand its business.”
Masayoshi Son’s latest mega investment has been attracting much attention from media and industry. When he makes an investment, he usually waits and sees until the company shows meaningful performance instead of easily pulling out his money.
In 2000, Softbank invested around $20 million won in China’s biggest e-commerce company Alibaba, and grew it into $70 billion in 14 years. At the time, not many investors paid attention to the Chinese firm but Son had confidence in the growth potential of e-commerce business. Currently, Softbank is the largest shareholder of Alibaba with a 34 percent stake.
Softbank was also known for boosting market value of Finland’s mobile game company Supercell after making a huge investment. The Japanese company recently acquired additional 22 percent stake of Supercell through the American venture capital Accel Partners following the acquisition of 51 percent stake in 2013. Now, it has a 73 percent stake of the game maker. Supercell pulled up the sales to 1.5 billion euros last year, up 300 percent from the previous year.
The Japanese Internet giant is now eyeing the acquisitions of emerging nations including China, India and Indonesia. It recently invested $550 million in India’s e-commerce company Snapdeal and $564 million in China’s mobile car dispatching company.
