November 21, 2024

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Coupang headquarters in Songpa-gu, southern Seoul (Newsis)

New York-listed e-commerce giant Coupang set another quarterly record in the July-September period of this year on enhanced user engagement, with its revenue reaching $7.86 billion, a 32 percent jump from a year ago.

The company also returned to profitability in the quarter after posting operating losses in the previous quarter largely from the UK luxury shopping platform Farfetch it acquired last year and antitrust fines in Korea.

"The improvements we saw this quarter are most notably driven from improvements in both (Coupang) Eats and Farfetch," Coupang CFO Gaurav Anand said during an earnings call on Wednesday. "With regards to Farfetch, we are excited to report that we hit our goal of achieving near breakeven profitability."

The number of active users in its product commerce segments, including Rocket Delivery, Rocket Fresh, Rocket Growth and Marketplace, rose to 22.5 million, an 11 percent increase year-over-year and up by 800,000 from the previous quarter. Revenue per user in product commerce reached $318, an 8 percent increase from the third quarter last year and higher than the previous quarter’s $309.

"Our strong and consistent growth and expanding margins are the result of years of investment and a relentless drive to break tradeoffs, to do the hard things that deliver an ever-improving experience for our customers," Coupang Founder and CEO Bom Kim said.

Kim emphasized Coupang’s strong customer base, noting that engagement has deepened as the selection continues to expand in both established categories and newer offerings, such as fresh and fulfillment logistics.

“In the long run, growth from existing cohorts will be supplemented by the converging spend of new active customer cohorts." he added.

Revenue from growth areas -- including the Taiwan market, Coupang Eats, Farfetch and Coupang Play -- was $975 billion, more than tripling compared to a year earlier.

Farfetch, in particular, drastically reduced losses to $2 million from $31 million in the previous quarter.

Kim highlighted that Taiwan has seen meaningful supply improvements and rapid growth by partnering directly with more brands to broaden customer selection and inventory.

"We are excited to redefine what customers in Taiwan can expect from online retail and to alter the growth trajectory of the brands with whom we partner," Kim said.

Excluding the $439 million in revenue from Farfetch, Coupang’s revenue totaled $7.42 billion, a 25 percent increase year-over-year. Operating income for the third quarter was $109 million, a 29 percent increase compared to last year.

For the year’s first three quarters, Coupang’s cumulative operating income recorded $124 million, down 62 percent from the same period last year. While last year’s cumulative net income from first to third quarter reached $327.34 million, this year, the cumulative net loss over the same period reached $65 million.

Meanwhile, Coupang has announced plans to establish logistics centers in nine regions -- including Daejeon, Gwangju, North Gyeongsang Province and Busan -- by 2026, creating over 10,000 new jobs.

"The majority of the increase in the capex (capital expenditure) relates to infrastructure investments that we are making in Korea, which creates some unevenness in the timing and levels of spend. But we are exploring strategies to reduce the capital intensity of our real estate operations while also maintaining operational control over these strategic assets," the CFO explained.

By Kim Hae-yeon (hykim@heraldcorp.com)