🚀 Coupang’s Record Year
Coupang hit $27.7B in sales in 2024, the highest in South Korea’s retail history. Over 90% of its revenue came from selling directly from its fulfillment centers. Its total GMV, including its marketplace, surpassed $41.5B. Even after a 58% hike in its WOW membership fee, users spent 8% more in Q3 2024 than a year prior. Coupang also launched R.LUX, selling luxury beauty products to attract premium customers.
📈 Naver’s Commerce Boom
Naver achieved its largest GMV yet at $34.6B in 2024, up from $32.9B in 2023. Unlike Coupang, Naver connects merchants with buyers, earning commissions of 4-5%. Sales from its commerce arm hit $1.5B in the first nine months of 2024, second only to its search business. The company plans to spin off its commerce unit into a standalone app this March, aiming to consolidate its lead further.
📉 Rivals Falling Behind
Smaller players like Gmarket and SSG.COM struggled. Gmarket’s sales fell 16.4%, and SSG.COM saw a 6.2% drop in the first nine months of 2024. SK Square's 11Street faced an even steeper decline of 28.9%. Meanwhile, the Shinsegae-Alibaba joint venture, Grand Opus Holdings, set to launch in March, hopes to challenge the dominance of Coupang and Naver.
🔒 The Power of Membership
Both giants relied on subscription models to retain users. Coupang’s WOW membership offered perks like free delivery, streaming, and discounts. Naver Plus Membership provided similar benefits, partnering with Netflix and Yogiyo. These services locked in customers and reduced churn. Despite competition, Coupang and Naver seem poised to maintain their lead in the $200B South Korean e-commerce market.
Can Shinsegae and Alibaba disrupt Coupang and Naver’s dominance?
