Coupang’s parent company, Coupang Inc., reported an operating loss of $450 million (approx. 642.3 billion won) in the third quarter despite an increase in revenue. This loss is comparable to its annual operating profit of 6790 billion won from the previous year, marking the third consecutive quarter of deficits following a personal data leak incident in November of last year.
Coupang Inc., listed on the New York Stock Exchange, announced on the 3rd (local time) that its third-quarter revenue reached $9.962 billion (approx. 14.2209 trillion won), representing an 11% increase compared to the same period last year.
Active customers in product commerce reached 25.2 million, a 2% increase compared to the third quarter of last year before the personal data leak incident occurred. Revenue per active customer also rose by 6% year-over-year to $332 (approx. 473,930 won).
The widening deficit despite growing sales was largely driven by the Incheon logistics center fire that occurred in July. Excluding the $248 million (approx. 354 billion won) in fire-related costs, the operating loss stands at $220 million (approx. 288.2 billion won).
An increase in the cost of goods sold also contributed to the deficit. The cost-of-goods ratio rose to 74.3% of total revenue, up from 70.6% in the same period last year. Distribution industry insiders noted that free returns, refunds, and nationwide free direct delivery services, including regional logistics operations, have inevitably added financial pressure.
During the earnings conference call, Coupang Inc. Chairman Kim Bom-suk highlighted supply chain disruptions, fixed-cost burdens driven by delayed demand recovery, and rising marketing expenses aimed at recovering churned customers as key factors impacting product commerce margins.
Chairman Kim stated that none of these issues are structural, describing some as deliberate short-term investments by the company and others as temporary headwinds. He added that the company will lower service costs while enhancing customer service quality over the long term through process improvements and automation in its logistics network.
The challenge is that conditions show little sign of improving heading into year-end. Anticipation is growing that the Korea Fair Trade Commission may impose over 200 billion won in fines against Coupang Eats over allegations of demanding preferential treatment, requiring terms no less favorable than those of competing platforms, and engaging in bundling practices.
In the second quarter, Coupang also posted its largest-ever quarterly revenue of 13.3007 trillion won, yet recorded its biggest deficit (8350 billion won) since its New York stock listing in 2021. Most of these operating losses stem from fines related to the personal data leak incident. Based on current projections, Coupang is on track to record an annual loss exceeding 2 trillion won this year, marking its largest operating loss since inception.
Meanwhile, despite the larger-than-expected losses, Coupang’s stock closed up 3.61% at $15.23 (approx. 20,000 won) per share on the 3rd, U.S. Eastern Time.
