How this Harvard dropout founded South Korea's most valuable start-up | Make It International

I'm inside the Coupang logistics center on the outskirts of Seoul. This company has been dubbed the Amazon of South Korea and was recently ranked as the country's

most

valuable

start

up. We know what truck it's going to come in, the route it's going to go out, and that tells us how it should be sorted here and when it should go out. That propelled founder Bom Kim to billionaire status and turned Coupang into a national icon. It's no exaggeration to say that we are in every apartment complex and every apartment building at least once a day. That's not bad for a guy who dropped out of Harvard Business School after just six months.

When he was in graduate school, he believed that he had a very short window to do something that would really have an impact. During a recent visit to Seoul, I sat down with the 41-year-old e-commerce CEO at Coupang's headquarters. And while he may have now reached the heights of success, he says he didn't exactly set out to become the next Jeff Bezos. In fact, when the $9 billion e-commerce giant

start

ed here in Seoul in 2010, it was like a completely different business. The shape of Coupang, the business model of Coupang, the current look of Coupang, went through many changes.

When Kim dropped out of business school in the late 2000s, he initially

founded

Coupang as a Groupon-style daily deals company. But when he realized the growing reach of technology, he quickly transitioned the company to a third-party online marketplace. It was a success. Within three years, Kim says, the company surpassed $1 billion in sales and was about to go public. But at the last minute he closed the deal and radically changed the business model, convinced that he could build something better. There had been

this

nagging feeling for months, where we had to be honest with ourselves and say, once you go public, it's much harder to actually change your direction.

And was the platform that we had built, the services and experiences that we were providing to our customers, creating a 5% difference or were we creating that kind of world where the customers that we love would be blown away? And the reality was that no. If we wanted to offer something that really mattered to customers, we had to go through a huge amount of change. We had to change our entire technology, the way we did business, our business model. This is a bold move when you're in the thick of an initial public offering (IPO). It was very, very difficult.

And I think that was the hardest choice, but the one I'm

most

proud of. Thus Coupang was born again,

this

time as an end-to-end shopping platform designed to manage the entire customer journey, from desk to door. South Korea's e-commerce market has grown rapidly over the past decade. This year, online sales are projected to increase 18% to reach more than $100 billion, ranking fifth globally after China, the United States, the United Kingdom and Japan. By 2022, it is expected to jump to third place. This is partly due to fast internet speeds and high smartphone penetration in a country famous for tech conglomerates like LG Samsung.

But it also reflects its culture. South Korea has some of the longest work hours in the world, meaning free time is scarce and consumers are willing to pay more for convenience. Curious to learn more, I sat down with Jade Lee, an analyst at market research firm Euromonitor, to hear her take on the Korean market landscape. There are several social factors that

make

e-commerce really successful in South Korea. Firstly, single-person households are growing rapidly and represent around 30%. These single-person households do not have enough time to

make

offline purchases. The second is well-developed digital infrastructure, especially simple mobile payment platforms.

And the last one is the well-structured logistics system. South Korea is relatively smaller, so it can set up logistics more quickly and easily compared to other countries. Kim responded to those market characteristics in spades. That included Coupang creating its own UPS-style logistics business, Rocket Delivery, designed to provide super-fast, personalized service. The only models we had seen were primarily like Amazon, which had built an impressive fulfillment infrastructure but had relied, in large part, on a very advanced infrastructure built by the United States Postal Service. And at that moment we really envied him. So we built, again, not only a fulfillment infrastructure, but also the largest fleet of directly controlled trucks and drivers to deliver those products in multiple ways throughout the day.

So what seemed like a curse at the time, that we had to build all this infrastructure and develop the technology to integrate it all, end-to-end, by ourselves, from scratch, ended up becoming a huge blessing. Today, Coupang's more than 5,000 delivery drivers, known as Coupangmen, deliver 99.3% of orders within 24 hours. Its new Dawn Delivery service even promises to go further than Amazon Prime, offering 7am delivery. for orders placed before midnight the night before. You can get lobster, fresh pastries... Fresh lobster for breakfast! Fresh lobster for breakfast! In fact, we also have breakfast foods. But if you have a birthday, you can get a cake in the morning.

If your printer is out of ink or you need a new computer, you can get one before 7 a.m. That service is not only a nice-to-have but also a necessity for a company that receives a third of its orders between 10 p.m. and midnight, Kim says. We noticed that most customers placed orders at night. And if they wanted more selection delivered faster, the best experience would be if they could order it before they go to bed, wake up and find it at their door. It's like Christmas! Yes, it's magical. According to Kim, this has helped him differentiate himself in a tremendously competitive market.

Last year, the country's largest e-commerce site also ranked as consumers' most preferred online retailer, beating out local competitors such as Gmarket and 11Street. Kim says the app has been downloaded by more than 25 million Koreans, representing about half of the country's population of 51 million people. Today, the company has over $10 billion in sales, well over $10 billion in sales, and is growing 60% year over year. That didn't happen because of something we did, you know, this year. That popularity also excites investors. As of November 2018, the company has attracted more than $3.6 billion from investors including Softbank, Sequoia Capital and BlackRock, giving the company an estimated valuation of $9 billion.

It's easy to have a dream and fail if you don't have shareholders and investors who are willing to take the journey with you for the long term. Kim now plans to inject that funding into the company's growth in Korea, developing its food delivery service and potentially expanding into new markets. Coupang is still focusing on the domestic market and trying to expand there. But with those financial investments from Softbank, Coupang is expected to reach other APAC regions. The environment that Korea has, the high urbanization, the extreme population density and the IT infrastructure, are things that I think will be shared by customers in many areas, many regions, especially in Asia, as they modernize.

We have offices all over the world. We have offices in Silicon Valley, Seattle, Beijing and Shanghai, so in many ways we are building a global company. But ultimately, Kim says his main mission is to remain committed to customer service. And if that means reinventing your business once again, well, at least you have the experience. I don't know if I can tell you that six months from now, or six years from now, we will be similar to how we look today. But I can tell you that we will always be a company, a technology company, trying to harness what we can of human ingenuity and technology to obsess over some aspect of customers' lives that we want to improve exponentially.

That will be a constant.