Coupang Inc., the parent company of South Korean e-commerce giant Coupang, recorded an operating loss of $450 million (approximately 6423 billion won) in the third quarter despite rising sales. This figure is comparable to its annual operating profit of 6790 billion won from last year, marking three consecutive quarters of deficits following a personal data leak incident in November of last year.
Q3 Revenue Growth and Business Segments
CoupangInc, listed on the New York Stock Exchange, announced on the 3rd (local time) that its third-quarter revenue reached $9.962 billion (approximately 14.2209 trillion won), an 11% increase compared to the same period last year. By business segment, product commerce (Rocket Delivery, Rocket Fresh, Rocket Growth, and Marketplace) revenue grew 8% year-over-year in Korean won terms, while growth business segments such as Taiwan Rocket Delivery, Farfetch, and Coupang Eats saw a 27% increase.
Active customers in the product commerce sector reached 25.2 million, a 2% increase compared to the third quarter of last year, prior to the personal data leak incident. Revenue per customer also rose 6% year-over-year to $332 (approximately 473,930 won).
Impact of Logistics Fire and Rising Costs
The widened deficit was heavily influenced by a fire at the Incheon logistics center in July. Excluding 248 million dollars (about 354 billion won) in fire-related costs, the operating loss stands at 220 million dollars (about 288.2 billion won). During the earnings conference call, CoupangInc Chairman Kim Bom-suk cited supply chain disruptions, fixed cost burdens from delayed demand recovery, and increased marketing expenses to win back churned customers as factors affecting product commerce margins.
Chairman Kim stated, "None of these items are structural problems. Some are short-term investments chosen by the company, while others are temporary headwinds." He added, "Long-term, we will improve customer service levels and lower service costs through process improvements and automation in our logistics network."
Bleak Year-End Outlook and Regulatory Pressures
The year-end outlook remains challenging as the Korea Fair Trade Commission may impose over 200 billion won in fines over Coupang Eats' alleged "most-favored-nation treatment" (demanding conditions no less favorable than other platforms) and "bundling" practices.
In the second quarter, Coupang posted record-high quarterly revenue of 13.3007 trillion won due to personal data leak penalties, yet suffered its largest deficit (8350 billion won) since its New York listing in 2021. Under current projections, Coupang is on track to post an annual operating loss exceeding 2 trillion won this year, marking its largest operating deficit since founding.
