rs of the same items. Meanwhile, the latter is welcoming the opportunity to put foreign-sourced merchandise into Korean hands (and mouths), no matter where they come from or what they cost. Indonesian consumers will have to pay more and Koreans will pay less for a wider variety of foreign-sourced goods. Korea’s e-commerce giant, Coupang, is optimistic about the potential for its “global marketplace”, which gives Koreans easy access to the products of sellers outside its home country. Rather than playing favourites with its own SMEs as the Indonesians are doing, Coupang is reaching out aggressively to SMEs in countries like Taiwan. Sellers there are being handed the keys to Coupang’s customer base, which in the second quarter of this year, was just shy of 20 million. Conversely, Coupang’s initiative gives Taiwanese consumers access to millions of Korean products, 70 per cent of which are produced by Korea’s own SMEs, company founder and CEO Bom Kim says. To be fair to the Indonesians, protection of SMEs is not something unique to Indonesia by any means: indeed, Korea itself has long been famous for its industry policies that have subsidised and protected specific industry sectors and made it too difficult for foreign entities to compete. That’s why, for example, the four largest shipbuilding companies are in Korea. However, when it comes to e-commerce, the playing field is different and Coupang, in particular, is a keen advocate of free trade, with good reason. The stakes in Taiwan are high Coupang is called the “Amazon of Korea” but when Amazon decides that a particular foreign market is too difficult it can pull out and still be able to fall back on a massive global market, including its own in the US. Coupang doesn’t have that luxury because the Korean market alone won’t be big enough to sustain high growth indefinitely. True enough, it is highly fragmented and there is a lot of growth still to be had by consolidating smaller competitors. However, some of the other metrics are not so great: Korea’s population is beginning to get a bit long in the tooth and its fertility rate is the world’s lowest. Technology penetration is already high so there isn’t much upside there either. In the short term then, Coupang can continue to grow by Darwinian means in its own market: by outlasting less fit competitors and taking their customers. Long-term though, it needs to look further afield and has already dabbled in a small number of overseas markets, most notably Japan. However, it withdrew from Japan in March of this year because it couldn’t make the economics of its rapid delivery business work in the face of fierce local competition So although the company’s results for the second quarter, released last week, were eye-catchingly impressive, analysts on Coupang’s conference call were understandably anxious about the situation with its foray into Taiwan, which would also be a test case and platform for expansion elsewhere in the region. The nervy questions about Taiwan came thick and fast. “I’d like to know the Coupang value proposition to Taiwan consumers at this point” one attendee asked. And another, “I think you pulled out of Japan. So what would be some of the situations where you would not pursue Taiwan anymore?” Bom Kim was nothing if not chipper in his responses: “Our value proposition is the same as Korea. We’ve always believed that the transformational customer experience we built in Korea would resonate with customers in other markets. That so far is playing out in Taiwan.” “In Q2, Coupang was the most downloaded app in Taiwan. And in the 10 months since we launched Rocket Delivery, Taiwan has scaled faster than Rocket Delivery in Korea did in its first 10 months post-launch.” Coupang’s approach to overseas expansion, with Taiwan being the latest example, is to invest in the development of the same rapid delivery system that has made it the dominant player in Korea. The cash commitment and risk are high. Coupang’s main competitor in Korea, Naver, has eschewed this approach in favour of something different: it launched its expansion into the US market by buying California-based fashion social marketplace Poshmark. Coupang, to its credit, has so far resisted the temptation to throw good money after bad, with the exit from Japan being an example. However, the crown jewel of its competitive advantage – logistics and fast delivery – have come at a cost to the quality of the work experience for its warehouse and delivery staff, who reportedly formed a union in April. They are also unhappy about layoffs and in particular about being made redundant by robots, which the company adores and is keen to use even more. Complaints by delivery and warehouse employees at other technology-driven companies in the region have become elevated in the past few years.  For now, Coupang wows  Coupang clearly needs to handle this issue adeptly, but there is no looking back because its delivery service is its main competitive advantage. And it has been using that advantage to whack the competition. Company revenues for the second quarter were US$5.8 billion ($9.1 billion), an increase of 16 per cent (21 per cent on a constant currency basis) on the same quarter a year ago. Net income swung from a loss of $75.5 million last year to a profit of $145 million this year. In fact, that loss in the second quarter of 2022 was the last time Coupang posted one. The number of active customers grew to 19.7 million, an increase of 10 per cent from a year ago. Customers are also spending more: on average $296 vs. $282. You’d have to be a real sourpuss to turn up your nose at those numbers, particularly from a technology company that operates in a ‘red ocean’ industry. So far so good, but investors will be watching Coupang’s progress in Taiwan ever more keenly.