Unicorn companies are rising rapidly, and the Korean e-commerce market has great prospects

It is reported that the news of Coupang's plan to list on the New York Stock Exchange has sparked a boom in Korean startups, and local entrepreneurs and experts said that South Korea still has a long way to go before unicorn companies can flourish.

Last October, South Korea's Ministry of SMEs and Startups identified 20 South Korean unicorn companies with a valuation of more than US$1 billion that have not yet gone public, and the first company on the list was Coupang.

In May 2014, Coupang's revenue broke the 1 trillion won ($910 million) mark, according to South Korea's Ministry of Economy and Social Security .

It is understood that Coupang plans to be listed on the New York Stock Exchange (NYSE) with a scale of US$1 billion . When the plan was announced, the government announced that it would expand its support for start-ups.

South Korea's Deputy Prime Minister for Economic Affairs said : "Coupang's IPO is a major achievement for South Korea's unicorns, and we will do our utmost to strengthen the entrepreneurial ecosystem."

Industry insiders said that South Korea's current entrepreneurial environment makes it difficult for the second Coupang to be born. Taking the Tada controversy as an example, there are reports that the government's measures are too strict .

Ride-sharing service Tada gained more than 1 million members in less than a year after its launch , but its growth was resisted by the taxi industry, leading the National Assembly to pass a bill banning Tada cars in March . Since then , Tada's service has been discontinued.

"In South Korea, mobile, fintech and healthcare are the only areas that can break out , however, strict regulations make it difficult for unicorns to emerge, and even if they do emerge, they grow slowly , " said Sookmyung, a professor at the business school.

The Ministry of Finance said that as of October, seven unicorns had successfully earned back their investments by selling their companies or going public. Woowa Brothers was sold to Delivery Hero , cosmetics company Itshanbul and game developer doublegames were listed on Kospi, and Pearl Abyss and Kakao Games were listed on Kosdaq.

TMON, Krafton, Yanolja and Socar are among the unicorns preparing to list on the Kospi this year. However , Yellow Mobile and L&P Cosmetic have halted their preparations.

Online shopping platform WeMakePrice incurred an operating loss of 54 billion won last year , a reduction of about 30% compared to 2019. In 2020 , WeMakePrice's sales reached 386.4 billion won, a 17% decrease from its 2019 performance .

" Local venture capital firms are short on funds and usually make short-term investments , most large investments come from overseas venture capital firms, and local big companies cannot acquire start-ups because people think they will intrude into brick-and-mortar businesses," said an industry insider.

"The public sector is focused on diversified investments, so there are limits on investing in promising startups," said Lee Ki-dae, chief operating officer of Startup Alliance.

South Korea

unicorn

E-commerce