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| Coupang's headquarters in southern Seoul / Yonhap |
By Anna J. Park
As Coupang has decided to enter the financial industry, launching Coupang Financial earlier this month, market watchers view the move as an attempt by the e-commerce firm to secure a stable cash cow business.
According to the Financial Supervisory Service (FSS), Coupang Financial, a subsidiary of Coupang Pay, registered itself as a specialized credit financial business on Friday, officially entering the country's credit financial industry. Coupang Pay holds a 100-percent stake in Coupang Financial.
With capital assets of 40 billion won ($30 million), Coupang Financial meets the requirement for the specialized credit financial business, which normally requires capital assets of over 20 billion won.
Market analysts expect that Coupang will be attempting to expand its financial services to a wider area of financial sectors and retail consumers, once it successfully operates providing credit loan services to Coupang's suppliers and store vendors.
They forecast that Coupang Financial will follow the path of Naver Financial during its first phase of business. Naver Financial first provided loans to online vendors of their platform, followed by launching unsecured credit loans for offline business operators as they expanded the scope of their financial business.
Likewise, Coupang Financial is aiming to expand its loan services. While starting to provide loans to small vendors on the shopping platform during the second half of this year, the firm is expected to reach a wider scope of consumers in the near future.
"Coupang Financial aims to continue to provide and develop innovative and specialized financial products that are tailored to the needs of e-commerce consumers as well as small- and middle-sized vendors," an official from Coupang said.
Jung Cue-jin, an analyst at SK Securities, highlights that one of the core reasons behind Coupang's entry into the lending business is to enhance profitability.
"Without having a solid cash cow business, Coupang is trying to overcome its losses through entering into financial industries," the analyst said. "Starting from securing easy payment systems, e-commerce businesses are in general attempting to advance into financial industries, ranging from credit loans to asset management," the analyst added.
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