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Corporate culture

Inside Coupang: Close-knit, challenge-seeking, data-driven

Industry watchers say Coupang's unique culture is the key to its skyrocketing growth

By Jun 01, 2021 (Gmt+09:00)

Coupang's delivery man and delivery truck
Coupang's delivery man and delivery truck

Coupang Corp. has a unique corporate culture for a company headquartered in South Korea.  

Industry insiders highlight that this uncommon culture separates Coupang from its domestic rivals and was the main driving factor behind the company’s successful IPO in the US.

In slightly more than 10 years since its foundation in 2010, Coupang is valued at more than $70 billion on the New York Stock Exchange as of May 28.

A CLOSE-KNIT COMMUNITY WITHOUT HIERARCHY

Coupang is a large community made up of around 7,000 full-time employees, or more than 54,000 people including part-time delivery and logistics workers.

In managing such a large group of people with diverse backgrounds, Coupang’s main focus is maximizing the efficiency of communication to keep the community as close-knit as possible.

First, all Coupang employees call each other by their English names, a rare practice among Korean firms. For instance, Coupang founder and CEO Kim Bom-seok is simply called by his first name Bom by his colleagues.

Such a company-wide endeavor to break the hierarchy has nurtured a culture of open and free communication within the organization, Coupang insiders say.

Second, Coupang has been a leader of contactless communication. Unlike other South Korean companies whose C-level employees and other managerial positions mostly reside where the corporate headquarters are located, Coupang’s executive-level employees and managers live all around the world.

For instance, the company’s chief technology officer (CTO) Thuan Pham lives in the Silicon Valley of the US. Other top-level executives live in China, Singapore, the US, as well as in South Korea.

Coupang CTO Thuan Pham is an ex-Uber CTO
Coupang CTO Thuan Pham is an ex-Uber CTO

Third, Coupang invests heavily in employing a large group of full-time interpreters to minimize the language and cultural barriers within the organization. Coupang’s employees are from all around the world, including China, India, Luxembourg, Myanmar, Nepal, Switzerland, Vietnam and the US.  

According to sources, Coupang employs the highest number of interpreters among all private and public organizations in Korea.  

A GROUP OF CHALLENGE-SEEKERS WITH AUTONOMY

Coupang has been recording hundreds of millions of dollars of operating losses annually for years. But the company and its employees are far from stopping their new business experiments.

Insiders say that Coupang is full of challenge-seekers who love to solve problems. 

Coupang’s group of Product Owners (POs), often referred to as mini-CEOs, are representative examples of the challenge-seekers working at the company.

There are about 100 POs at Coupang in total. Every PO is a high-level manager responsible for either presenting and developing a new business idea, or improving the effectiveness and efficiency of the company’s existing business operations.

Unlike a typical South Korean conglomerate that would have put all POs into a single task force or a separate function under the name of Strategic Planning or Future Business, the POs at Coupang work under the same organizational structure as the other employees.

Once the business ideas and proposals are approved by the company, the POs are supported with the financial and human resources that they have asked for, just like a CEO would.

“Unlike many businesses, Coupang does not have annual business plans or annual organizational restructuring, assuring flexibility of the organization,” said a Coupang official.
 
PUTTING FACTS AND DATA BEFORE EVERYTHING

Another culture that Coupang boasts is its serious focus on facts and data. Coupang says that its business can essentially be summarized as “testing an endless number of hypotheses.”

Coupang’s practice of minimum viable product (MVP) exemplifies its way of working. MVP is a practice where Coupang runs a small pilot test before expanding the pilot size to the next level, ultimately with the goal of extending the scope as a company-wide business.

Its food delivery service Coupang Eats provides a good sample MVP. Coupang Eats, a latecomer in the market, differentiated itself with its Single Delivery service, where the driver delivers a single order to a single destination in a trip.

The industry norm had been that the driver would deliver multiple food items to a number of destinations in a single trip, for better cost and efficiency. But under this practice, sometimes the food got cold or soggy before the delivery.

Coupang’s hypothesis was simple: all consumers want food delivered in the same condition as it would be at the restaurants, hot and fresh.

To test the hypothesis, Coupang started to accumulate data in only selected regions in Seoul and nearby cities. After proving that their hypothesis had been right, Coupang Eats expanded the service to cover a larger region.

“There is a culture of experiments at Coupang, running thousands of new experiments every year. Every new function or service goes through A/B tests before its launch,” said Coupang CTO at Coupang Reveal 2020, the company’s first conference for software developers.

The data-driven and experiment-oriented culture has extended out to every area in the organization, says Coupang employees.

For example, Coupang’s recent decision to replace paper packaging with more eco-friendly materials came after many rounds of data-based experiments.

“It is almost impossible for other e-commerce and logistics firms to stop using paper packaging – workers in a rush often throw around the boxes, which can damage the goods inside. But for us, the data-driven culture allows packaging all goods in exact order at more than 100 distribution centers. We don't have to rush and throw around the boxes, so we can forgo paper packaging,” said a Coupang official.

Write to Dong-hui Park at donghuip@hankyung.com

Daniel Cho edited this article.

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