Coupang: Normalization (Ticker: CPNG)

A wide moat business that keeps shooting itself in the foot.

Next three weeks at Emerging Moats: BBB Foods (Full Research Report), Interactive Brokers (Quarterly Update), Nintendo (Quarterly Update)

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“Across the board, customers are re-engaging in ways that reflect the conviction they’ve long placed in the Coupang experience. It’s worth spending a moment on how this recovery shows up in the reported numbers in product commerce. Year-over-year growth will take time to fully reflect the underlying recovery. The months of paused compounding from the affected period continue to weigh on the comps even as customer behavior normalizes. Our revenue growth rate trajectory from January to March is running ahead of historical patterns. We expect the year-over-year comps to continue improving throughout the year. Turning to margins. Two distinct factors are pressuring profitability this quarter. I want to describe them separately because they behave very differently going forward. The first is the customer vouchers we issued in response to the incident. These are one time in nature.

The bulk of the impact is contained to Q1, with a modest tail into the first part of Q2. The second is a set of temporary inefficiencies in our network. Our capacity build-out and supply chain commitments are all made well in advance, calibrated to a demand trajectory we project based on a stable, predictable customer pattern. That’s how we manage cost to serve efficiently, and that’s the path we were on before the incident. When an external event of this kind disrupts that pattern, actual demand falls short of what those commitments were sized for, and we carry the cost of underutilized capacity and inventory secure through the period. As demand returns to a predictable curve, we expect our capacity and supply chain to come back into balance and the inefficiencies to work their way out.” - Bom Suk Kim, Q1 2026 Conference Call

After seeing the facts of the Coupang data leak “scandal” from late 2025, I was highly dismissive of the incident. Taken in isolation, a small data leak should not have caused a 50% drop in the share price. As discussed in my previous Coupang report, the reaction to this scandal was entirely overblown, and the few customers who stopped shopping on the Coupang online marketplace began returning a few months later. A year from now, the incident will be forgotten.

Last week, another incident occurred at a Coupang warehouse. One that will be covered less in the international media, but that could be much more damaging to the online shopping platform’s brand in South Korea. It is the first time I have begun – at least slightly – questioning my trust in this management team.

At the same time, we still have a stock trading at 3x gross profit, set for double-digit annual revenue growth, led by a highly intelligent founder and featuring fantastic emerging moat characteristics.

In this update, subscribers will read:

• Safety negligence?

• Normalized profitability

• Throwing money at growth projects

• Is there still an emerging moat?

• My investment decision

• Portfolio update

Safety negligence?