Has Amazon Found Its Competitor?

Marios Athinodorou

Coupang is the largest e-commerce site in South Korea and entered the market in 2010. Its annual sales revenues are more than $3 billion. With a value of more than $5 billion and $1.4 billion in venture capital investment, this company considers as one of the fastest-growing company in South Korea, and it is growing in a very competitive market. Based on CNBC, it is a strong candidate for an IPO in 2019 or 2020.

A competitive advantage of Coupang over Amazon is the refund. For example, in case you bought an item from Coupang and you want to return it for any reason, you can do it with just a few clicks on their app. Then you place the item outside your door with no invoice or boxes and they will come and pick it up in few hours. After, you get your refund. There is no doubt that this is an awesome service! Another considerable competitive advantage against Amazon is that Coupang usually delivers within the same day or the next day the latest. The considerably cheap delivery service gives Coupang another advantage.

Bom Kim, founder and CEO of Coupang, stated: “The way we’ve approached it is integrating from end to end, we’ve built our own last mile”. Currently, Coupang has more than 10,000 employees, including 4,000 delivery drivers. Moreover, the company keeps records of all customers’ interactions for a more refined service.

The Bank of America Merrill Lynch is telling their customers that mutual funds have greater and larger stakes in Amazon and Netflix compared to the market indexes. A possible outcome of this could be a hit on the Amazon stock. Additionally, President Trump has tweeted about Amazon many times in recent days. Among others, the President claimed that Amazon had not paid the post office for its delivery services. According to CNBC, Amazon and Netflix shares dropped more 11% over the last week. Both stocks fell more than 5% on Monday but bounced back on Tuesday.

Amazon: Technical Analysis

Based on the Ichimoku system, it could be noticed that, at the moment, the Amazon stock seems to be in a bearish mode. The price, the lines Kijun Sen and Tekan Sen, and Chikou Span appear below the cloud. We could probably wait to see the price reaching the Tekan Sen and bounce for a potential bear signal.

Amazon 1H Chart

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

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