Is Coupang following in footsteps of Amazon?

Coupang's logistics center in Goyang, Gyeonggi Province / Korea times photo by Bae Woo-han

By Kim Jae-heun

The country's largest e-commerce firm Coupang has been benchmarking every business strategy its U.S. role model Amazon has adopted.

Its recent move to start its own over-the-top (OTT) service seems to be a move to offer video on demand (VOD) streaming services like that of Amazon's Prime Video.

Amazon has already become one of the top OTT players with its Amazon Prime Video service launched in September 2006. The logistics titan took a video content service for its online shopping mall and converted it into an internet VOD service. Now, the platform has 150 million users worldwide.

Coupang successfully registered its online music streaming and VOD content service businesses with the government last Tuesday.

It also applied for trademarks for “Rocket Wow Play” and “Coupang Wow Play” with the Korean Intellectual Property Office (KIPO) last month. The two titles are thought to be possible names for Coupang's OTT and live commerce services.

Coupang looked set to launch an online video streaming service after it acquired Singaporean OTT service Hooq in July. Hooq is a joint venture established in 2015 by Singtel, Sony Pictures and Warner Bros. It successfully marked its presence in the local OTT market and expanded its business to countries including Indonesia, Thailand, the Philippines and India.

But it fell behind in the competition against global players like Netflix, filing for liquidation in March this year.

Coupang has failed to give any hints on its forthcoming VOD streaming service saying it cannot comment on its future businesses.

“We have applied for the trademarks Rocket Wow Play and Coupang Wow Play as part of our business ideas,” a Coupang official said.

The ultimate goal of Coupang is to become a total platform operator like Amazon or China's Alibaba. Its ambitions do not end simply with OTT or original content businesses.

Once it becomes an influential platform operator, it can expand its new businesses indefinitely. In fact, Coupang is currently developing various enterprises such as fintech, logistics, food delivery services and e-commerce. Some said Coupang's acquisition of Hooq was intended to widen its footsteps in retail, particularly in Southeast Asia.

Kim Chang-kwon at Mirae Asset Daewoo said the country's largest e-commerce firm is attempting to expand its business outside the Korean Peninsula. But concerns are that Coupang isn't in good shape in terms of financial soundness after its takeover of the Singaporean OTT platform.

Coupang reported an operating loss of 720.5 billion won last year. It managed to cut its deficit by 400 billion from 1.12 trillion won the previous year, but the accumulating deficit from 2014 shows it is in the red to the tune of 3.72 trillion won.