Bernstein Korea Internet: Korea E-Commerce - May Day Signal as Regulatory Risks Resurface for Coupang
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Bernstein maintains an Outperform rating on Naver and an Underperform on Coupang amid shifting dynamics in the Korean e-commerce landscape. While Coupang has seen recent stabilization in user traffic and GMV due to compensatory coupons, the firm argues that competitive pressures and regulatory risks remain severe. Naver continues to dominate growth, posting a 22% year-over-year GMV increase in March, dwarfing Coupang's modest 5% growth. March data also showed Coupang's paid users recovering 4% sequentially, fueling a short-term stock rebound that Bernstein believes already prices in the recovery.
Incremental market growth is heavily skewed toward merchandise categories such as fashion and beauty, perfectly positioning Naver's third-party Smart Store ecosystem to capture this consumer demand. Meanwhile, although Coupang Eats improved its 2025 operating margin to 2.8%, its operating profit to GMV ratio remains below 1%, which is insufficient to materially alter the company's overall margin trajectory.
Regulatory headwinds for Coupang are intensifying. The Korea Fair Trade Commission (KFTC) is expected to decide by May 2026 whether to designate Coupang's founder as a "same person," which would trigger chaebol-level governance requirements. Furthermore, the National Pension Service (NPS) recently sold the majority of its roughly KRW 200 billion stake in Coupang since its IPO, signaling caution. Bernstein cut its Naver target price to KRW 300,000 due to rising AI capex, while maintaining a $17 target for Coupang.