Core Business Sales Up, Wow Customer Stage Expansion, Smooth Sailing in Taiwan
First Ever Quarterly Sales Over 8 Trillion Won, Five Consecutive Quarters of Profit
Kim Beom-seok "Confident in Taiwan's Growth Potential... Opening Export Paths for SMEs"
"Coupang's core businesses, Rocket Delivery·Rocket Fresh·Rocket Growth (Marketplace seller Rocket Delivery), have grown rapidly, and along with increased customer participation in the 'Wow Membership' that has raised the level of all benefits within the Coupang ecosystem, attention is focused on the Taiwan market."
Coupang surpassed 8 trillion KRW in quarterly sales for the first time in history in Q3 this year. The number of customers who purchased Coupang products at least once per quarter (active customers) exceeded 20 million. The company also maintained an operating profit for five consecutive quarters. On the 8th, Coupang founder Kim Beom-seok summarized the key factors for this performance during the Q3 earnings conference call as the acceleration of the 'flywheel' effect with increasing product categories and customers, higher customer participation in the paid membership (Wow Membership), and smooth progress of Rocket Delivery in Taiwan.
"We performed well in our core business, expanded member usage services, and saw potential in new businesses"
Founder Kim emphasized, "The significant expansion of product categories in Rocket Delivery, Rocket Fresh, and the Marketplace all drove the performance." He added, "As the Rocket product categories increased, customer consumption also rose. Categories like consumables showed double-digit growth rates several times faster than the market average," and "Rocket Fresh and Rocket Growth grew more than twice and three times faster than the overall business, respectively."
He explained that the third-party (3P) business, including Rocket Growth, is showing strong growth surpassing other businesses. He stressed that there are additional growth opportunities in active customers and per-customer spending. He said, "Our active customers are now 20 million, but we still hold only a single-digit market share overall," and "By expanding Rocket Delivery and Rocket Growth products, we can achieve higher shares in both customer numbers and spending."
The expanded use of the Coupang ecosystem by Wow Membership customers is also a positive factor. Wow members who use Coupang Eats spend more in product commerce such as Rocket Delivery and overall spend twice as much as Wow members who do not use Coupang Eats. Founder Kim said, "Since the '10% Coupang Eats discount' policy, Wow members using Coupang Eats increased by 90%, and transaction volumes more than doubled in over 75% of the benefit areas," and "Coupang Eats market share is expected to reach about 20% by the end of the year."
Founder Kim stated, "Fundamentally, Coupang is not a consumer goods company, delivery company, or distribution company, but a company that breaks the trade-off structure to deliver 'Wow' to customers' daily lives," and "Wow Membership is the core of this broad mission, and we will make Wow the greatest value on earth for customers."
Regarding the Taiwan Rocket Delivery and Rocket Direct Purchase, which recently marked its first anniversary, he emphasized, "Our confidence in the long-term growth potential has increased," adding, "Taiwan Rocket Delivery grew much faster in its first year than Korean Rocket Delivery did in its first year," and "If the current trend continues, the Coupang application (app) will be the most downloaded app in the Taiwan market this year." The Coupang app has ranked first in shopping category downloads in Taiwan since Q2. He also highlighted, "Small and medium-sized enterprises have had difficulty reaching customers outside the domestic market, but Coupang has supported exports from more than 12,000 SMEs to Taiwan in just one year." Coupang recently opened its second fulfillment center in Taiwan and plans to open a third fulfillment center in the first half of next year.
First-ever quarterly sales surpassing 8 trillion KRW... five consecutive quarters of profit
According to the quarterly report submitted to the U.S. Securities and Exchange Commission (SEC) on the day, Coupang's Q3 sales reached 8.1028 trillion KRW (6.18355 billion USD; quarterly average exchange rate 1,310.39 KRW/USD), an 18% increase compared to 6.8383 trillion KRW in the same period last year. Sales in USD terms increased by 21% during the same period. This is the first time Coupang has surpassed 8 trillion KRW in quarterly sales. After first surpassing 7 trillion KRW in Q4 last year (7.2404 trillion KRW), Coupang exceeded 8 trillion KRW again in just three quarters. Growth businesses such as Taiwan, Coupang Eats, and Coupang Pay recorded sales of 217.52 million USD (285 billion KRW), a 41% increase year-over-year, supported by smooth exports to Taiwan.
Operating profit in Q3 was 114.6 billion KRW (87.48 million USD), an 11% increase compared to 103.7 billion KRW (77.42 million USD) in the same period last year. Net profit was 119.6 billion KRW (91.3 million USD), similar to 121.5 billion KRW (90.67 million USD) the previous year. Due to exchange rate effects, operating profit and net profit in USD terms increased by 13% and 1%, respectively, showing a higher growth rate than in KRW. Coupang has maintained operating profit for five consecutive quarters since Q3 last year and three consecutive quarters this year. However, operating profit decreased compared to Q1 (106.77 million USD) and Q2 (147.64 million USD) this year, which is explained by increased investments in growth businesses including Taiwan. Adjusted EBITDA losses in growth businesses were 160.82 million USD (210.7 billion KRW), about 117 million USD larger than the same period last year. Coupang stated this was due to accelerated investments.
Coupang's cumulative operating profit from Q1 to Q3 this year is 444.8 billion KRW (341.9 million USD). Considering that it recorded an operating loss of 228.8 billion KRW (195.42 million USD) during the same period last year, this represents a significant improvement in profitability.
The number of active customers at Coupang reached 20.42 million, a 14% increase compared to 17.99 million last year. This growth rate is higher than the 13% recorded in Q1 last year. Coupang's customer growth rate has increased each quarter this year: 5% in Q1, 10% in Q2, and 14% in Q3. The number of customers has increased by approximately 2.3 million so far this year. Active customer revenue per person was 303 USD (397,040 KRW), a 7% increase compared to the same period last year.
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