Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 30 years of experience in the Korean/Asian equity research. Major sectors coverage include the following:
- Technology 
- Consumer 
- Special Situations/Deep Value Plays
- Tender Offers/M&As
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

Coupang 1Q 2021 Earnings - Decline in Profit Margins Raises Concerns

CPNG: 1Q21 - Revenues Soar, Losses Deepen

Coupang's Anticipated Disappointment, but 1P's Trouble Makes Us More Worried

2020 Financials Comparison of Kurly Vs SSG.Com (IPO Candidates in 2021 & 2022)

Emart's Restructuring Progress In the Midst of COVID-19

Emart Announces Concrete Restructuring Measures to Improve Profits

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Equity Bottom-Up

<div class="content-highlight"><p>On 8 April, <a href="https://www.smartkarma.com/entities/e-mart-inc" target="_blank" data-smartkarma-citation="entities:6993:1" rel="noopener">E Mart Inc (139480 KS)</a> double downed on the pricing war against major competitors such as <a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a>. Emart started a discount strategy of providing the lowest prices versus the competitors. If the consumers find products sold at other competing e-commerce websites such as Coupang or Lotte Mall that are priced lower than the ones sold at Emart, then the difference in the amount can be accumulated as "e-money" by the Emart customers. </p></div><p>On 9 April, Kurly also announced that it will launch a new customer acquisition strategy with interesting marketing and discount promotions lasting until the end of next month. This extreme price competition by Emart, Kurly, and others will likely drive the overall industry margins even further in the next several months.</p><div class="content-highlight"><p>Overall, we maintain our long-term (one year) positive view on Emart. We think that the company has been making some excellent reorganization moves and SSG.com IPO in the next one to two years is likely to surprise many investors (positively). Nonetheless, it is becoming more apparent that the price competition in the e-commerce/retail industry in Korea by major players such as Emart, Coupang, and Kurly will be getting worse in the next several months and this could negatively impact these players as well others such as <a href="https://www.smartkarma.com/entities/lotte-shopping-co" target="_blank" data-smartkarma-citation="entities:2338:1" rel="noopener">Lotte Shopping Co (023530 KS), and</a> other home shopping companies in the near term. </p></div>

On 8 April, E Mart Inc (139480 KS) double downed on the pricing war against major competitors such as Coupang (CPNG US). Emart started a discount strategy of providing the lowest prices versus the competitors. If the consumers find products sold at other competing e-commerce websites such as Coupang or Lotte Mall that are priced lower than the ones sold at Emart, then the difference in the amount can be accumulated as "e-money" by the Emart customers. On 9 April, Kurly also announced that it will launch a new customer acquisition strategy with interesting marketing and discount promotions lasting until the end of next month. This extreme price competition by Emart, Kurly, and others will likely drive the overall industry margins even further in the next several months.Overall, we maintain our long-term (one year) positive view on Emart. We think that the company has been making some excellent reorganization moves and SSG.com IPO in the next one to two years is likely to surprise many investors (positively). Nonetheless, it is becoming more apparent that the price competition in the e-commerce/retail industry in Korea by major players such as Emart, Coupang, and Kurly will be getting worse in the next several months and this could negatively impact these players as well others such as Lotte Shopping Co (023530 KS), and other home shopping companies in the near term. 

Emart & Kurly - Double Down On the Pricing War Against Coupang