Shulou(Shulou.com)11/24 Report--

According to news in the morning of February 7, Beijing time, South Korean e-commerce giant Coupang has lost billions of dollars since its inception. In order to reduce losses and turn a profit, the company has come up with a new strategy: to use "robot legions" in order delivery centers.

Coupang is the South Korean Internet industry to deal with the birth of Amazon in the United States. In order to achieve rapid delivery and increase consumer options, the company has built a large number of order delivery centers and logistics warehouses in South Korea, burning large amounts of cash in the process.

Today, the company is close to breaking even. Some analysts predict that the company will soon turn a profit for the second consecutive quarter and will achieve positive annual operating profit for the first time in 2023.

One day in February this year, Coupang showed off a "cool techs" order delivery center in the southern city of Daegu. A large number of self-driving "short" robots (AGV for short in industry jargon) converge on a berth. Each of these robots can carry 1000 kilograms of goods, they look like a bookshelf and can move as flexibly as a floor sweep. in the warehouse, these robots will transport the goods to the picker or tallyman. With these robots, the workload of warehouse workers has been reduced by 2/3.

Coupang's order delivery center in Daegu is a 12-story building with a total investment of $260 million, and recently, for the first time, the company demonstrated the center's "nerve center" completely controlled by artificial intelligence. In fact, Coupang has kept a low profile in the past, but is now showing off its technology in a high profile, and it is said that similar robot automation technology will be extended to other order delivery centers of the company.

Mr. Cui (E.J. Choi), regional director of distribution at Coupang Daegu delivery center, said the company already has plans to expand robotics and automation. Daegu City delivery Center is equivalent to a pilot and model, used to improve warehouse operation efficiency, continue to improve consumer shopping experience, while reducing the labor intensity of staff.

Daegu delivery Center shows a gorgeous scene of science and technology, reflecting how artificial intelligence hardware can assist human labor.

In the warehouse, the above automatic transport robot works in an enclosed space to prevent collision with the staff. The robot will move to a specific shelf, take out the product, then drive flexibly left and right, and deliver it to the staff, who will take the product out of the top of the robot shelf.

On the other floor of the delivery center, there are a large number of tally robots, which will store goods reasonably according to the algorithm developed by Coupang, so that they can get the goods out as quickly as possible in the future. These robots are new and flexible on the white ground and look like children flying all over the skating rink.

Like many startups, Coupang was born with the support of some financially powerful investors (such as Japan's Softbank Corp. Group) and had access to a lot of development capital. Today, however, the situation has changed, and the share prices of many startups that have been unable to make a profit have plummeted.

New investments are hard to come by. In the last quarter, for example, the investment in the Vision Fund of Softbank Corp. Group was cut by as much as 95 per cent.

Coupang has been expanding its service network in South Korea with the support of investors and financing from a public offering in 2021. Recently, Coupang has further increased delivery speed and expanded its service area, and the company has also made a price increase, but this has not affected the continued growth of users.

In March 2021, Coupang listed on the New York Stock Exchange at $35 a share, and its share price has more than halved from its offering price.

In addition, the company has experienced a number of controversial incidents in the past few years. For example, a fire broke out at an order delivery center in Lichuan, South Korea in 2021, and employees protested, demanding better working conditions and higher wages. Later, the company promised to keep the workplace safe and began to provide medical and health benefits to its employees.

The founder of Coupang is Bom Kim. According to the strategy formulated by Jinbaoxi, Coupang plans to enter Taiwan, Japan and other markets in the future.

In November last year, Kim Po-suk said in a conference call with investors that the company was very excited about the long-term development opportunities in overseas markets outside South Korea, and that the company's further investment move was also a sign of confidence in future opportunities.

In Korea, Coupang has 100 order delivery centers and logistics warehouses. So far, however, the company has not built an automated delivery center as advanced as Daegu in overseas markets, and has not given detailed plans for overseas market expansion.

Yang Zixiao, an analyst at Blue Lotus Capital Consulting, said internationalization is a huge challenge for Coupang, which means they will compete with Internet giants like Amazon.

Yang Zixiao says global expansion is not easy, at least for now. For example, in the field of e-commerce, in addition to familiar giants such as Amazon and Alibaba, there are other new players, such as Chinese cross-border e-commerce company Shein, and even short video overlord TikTok also wants to open up e-commerce, so e-commerce will be a very crowded market.

For its part, Coupang has decided to promote automation and robotics in the order delivery center. The Daegu order delivery center is their starting point, not their end.

Mr. Cui, regional director of Coupang, said that the robotic technology in the warehouse is a very modular and flexible system, and Coupang can easily replicate these technologies in other delivery centers.

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