SEOUL, Nov. 21 (Korea Bizwire) — Coupang said Wednesday it has attracted US$2 billion from Japan’s Softbank Group Corp., a move that could give a boost to South Korea’s top e-commerce company mired in mounting losses in recent years.
The South Korean retailer said it will use investments from Softbank Vision Fund in innovating its online mall’s digital system, logistics and payment platform.
It marks the largest amount of investment ever to have been attracted by a South Korean e-commerce company. In 2015, Softbank invested $1 billion in Coupang.
Coupang has some 120 million items on its platform, among 4 million of which can be delivered in one day after placing an order, according to the company.
Founded in 2010, Coupang’s revenue grew from 1.13 trillion won ($997 million) in 2015 to 1.92 trillion won in 2016 and 2.68 trillion won last year.
Yet, its operating loss widened from 547 billion won in 2015 to 560 billion won in 2016 and 638.8 billion won in 2017.
Coupang said its sales are expected to reach 5 trillion won this year.
The latest announcement came as competition is heating up among South Korean retailers to grab the lead in the rapidly expanding e-commerce market in a country where a growing number of consumers shop online for items ranging from clothes to electronic goods.
Last month, South Korean retail giant Shinsegae said it has secured a 1 trillion-won investment from two private equity funds in Asia as part of its ambitious bid to become the South Korean equivalent of U.S. online retail giant Amazon.
Shinsegae’s e-commerce business has been posting double-digit growth since the launch of an integrated online mall for its subsidiaries, SSG.COM, in 2014, it said. The online platform logged 2 trillion won in sales in 2017.
In August, Lotte, the country’s fifth-largest conglomerate, also launched a new department in charge of its online business.
Lotte said it plans to inject 3 trillion won into the e-commerce part in the next five years with an aim to generate 20 trillion won in sales by 2022.
The total value of transactions made with computers, smartphones and tablets reached a record 9.13 trillion won in September, up 15.3 percent, or 1.21 trillion won, from a year earlier, according to the data from Statistics Korea.