Coupang's Q2 Sales Exceed 6 Trillion Won... Soaring Toward Profitability (Comprehensive)

Q2 Sales $5,037.82 Million... 27% Increase YoY

Coupang recorded sales of over 6 trillion won again in the second quarter of this year, following the first quarter. The deficit was reduced by 87% compared to the same period last year, with quarterly operating losses falling below 100 billion won, the lowest since its listing. This is attributed to a significant improvement in the profitability of its core businesses, Rocket Delivery and Rocket Fresh. It is evaluated that Coupang, which had continued to incur losses due to aggressive investments, has now officially started profitable management.

On the 11th, Coupang announced that its sales for the second quarter of this year amounted to $5.03782 billion. Applying the average quarterly exchange rate of 1,261.37 won, this equals 6.35 trillion won. This figure represents a 27% increase compared to the previous year. Based on the current exchange rate of 1,305 won, it amounts to 6.5743 trillion won. Operating losses were $67.14 million (based on the average quarterly exchange rate, approximately 84.7 billion won), down 87% from the same period last year. Compared to the previous quarter, it decreased by 67.3%. Supported by these results, Coupang’s stock price rose 4.11% that day, closing at $19.76, and even surpassed the $20 mark during trading. This is the first time in four months since April 4 that Coupang’s stock price has exceeded $20.

◆ Full-scale ‘Profitable Management’ Launch=Since its listing on the New York Stock Exchange in March last year, Coupang recorded quarterly operating losses below 100 billion won for the first time. This is interpreted as a result of focusing on profitability improvement this year. Coupang’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) posted a profit of $66.17 million (83.5 billion won). This is the first profit since the launch of Rocket Delivery in 2014. Previously, in the first quarter, only the product commerce sector including Rocket Delivery was profitable, but this time the profit trend expanded to the entire company.

Industry experts analyzed that the effect of Coupang’s investment of several trillion won over the past few years to build more than 100 logistics centers and delivery camps in 30 regions nationwide is now showing results. It is accelerating its transformation from a ‘perennial deficit company’ that lasted 12 years since its founding in 2010 into a profitable e-commerce company. In fact, global investment banks such as Morgan Stanley and Credit Suisse have predicted that Coupang will successfully turn profitable in 2024. Kim Beom-seok, Chairman of Coupang Inc., said, "The second quarter results are only a part of showing the long-term business profitability," adding, "The e-commerce business has grown every quarter since listing, and this time was no exception, setting a new record."

◆ Effect of Wow Membership Investment=Chairman Kim cited investment in Wow Membership, which provides rich customer experiences, as a key driver of the second quarter performance improvement during the earnings conference call. Due to investment in paid membership, Coupang’s revenue per customer increased by 20% compared to the same period last year, and the number of active customers who purchased at least once on Coupang rose by 5% year-over-year. The profit increase from the Wow Membership price hike is expected to be reflected starting from the third quarter of this year. Kim said, "We invested $500 million in the second quarter alone in Wow Membership services such as fast Rocket Delivery for customers, Coupang Play, and special discounts," explaining, "Our goal is to change customers’ lives through Wow Membership services."

Since the launch of Rocket Delivery in 2014, the effect of continuous investment in logistics infrastructure technology to reduce various costs is also being fully reflected in these results. Coupang’s nationwide logistics infrastructure expanded from 700,000 pyeong at the end of 2020 to 1.12 million pyeong at the end of last year, which is 28% larger than the area of Yeouido (877,250 pyeong). Along with the expansion of logistics centers, Coupang has also introduced various AI-based logistics automation technologies that reduce employee workload and increase efficiency. Chairman Kim emphasized, "Despite the inflationary trend, investments in technology and logistics automation drove these results."