Operating Profit of 617.4 Billion Won Last Year... Sales Surpass 30 Trillion Won
Kim Beom-seok "4 Trillion Won Benefits for Wow Members... Providing Greater Value"
Coupang recorded an operating profit exceeding 600 billion KRW last year, achieving an annual surplus for the first time since its founding. Last year's revenue surpassed 30 trillion KRW, marking external growth, and net profit also exceeded 600 billion KRW annually. The number of paid members of the 'Wow Membership' exceeded 14 million, and Coupang's performance improvement trend is expected to continue for the time being.
On the 28th, Coupang released its Q4 earnings report, announcing that its annual operating profit last year was $473 million (approximately 617.4 billion KRW). With this, Coupang achieved its first-ever annual surplus since its establishment in 2010. During the same period, revenue was $24.383 billion (approximately 31.8298 trillion KRW), a 20% increase compared to the previous year. This is also the first time Coupang recorded revenue in the 30 trillion KRW range.
Coupang also recorded its highest quarterly revenue in Q4 last year. Coupang's Q4 revenue last year was $6.561 billion (approximately 8.6555 trillion KRW), growing about 20% compared to the same period last year. Operating profit during the same period was $130 million (approximately 171.5 billion KRW), a 51% increase compared to the same period the previous year. Coupang recorded its first quarterly operating profit (103.7 billion KRW) in Q3 2022 and succeeded in achieving its first annual surplus last year.
Coupang's adjusted net profit last year was $465 million (approximately 607 billion KRW). The adjusted net profit for Q4 last year was $137 million (approximately 180.7 billion KRW). These figures are similar to the operating profit scale for each period. However, Coupang explained in the report, "The accounting-reported net profit was $1 billion for Q4 and $1.36 billion for the year, but this includes $895 million due to one-time adjustments such as deferred tax asset recognition, which is not actual cash inflow." Reflecting this, the net profit for Q4 and the full year last year were $137 million and $465 million, respectively.
Revenue from growth business sectors such as Coupang Eats, Coupang Play, and the Taiwan market in Q4 last year was $273 million (approximately 360.1 billion KRW), about double compared to the same period last year. This is attributed to the expansion of Rocket Delivery in the Taiwan market and the growth of Coupang Eats domestically.
Looking at Coupang's revenue by business sector last year, product commerce sectors such as Rocket Delivery, Rocket Fresh, Rocket Growth, and Marketplace recorded $23.594 billion (approximately 30.7998 trillion KRW), a 19% increase from the previous year. Growth business sectors including Coupang Eats, Taiwan, Coupang Play, and Coupang Pay recorded $789 million (1.0299 trillion KRW), a 27% increase compared to the previous year.
So far, Coupang has stated that the accumulated deficits are 'planned deficits' for expanding logistics centers and other investments. Coupang has made large-scale investments to build its own logistics network, represented by 'Rocket Delivery.' In fact, the total operating losses from 2018 to 2022 amount to about 4 trillion KRW. However, the operating loss decreased sharply from $1.49396 billion (approximately 1.7097 trillion KRW) in 2021 to $112 million (approximately 144.7 billion KRW) in 2022.
Active customers 21 million... Wow members exceed 14 million
The number of customers using Coupang is steadily increasing. At the end of last year, Coupang's active customers were counted at 21 million. This is a 16% increase compared to 18.115 million in the same period last year. Active customers refer to the number of customers who purchased a product at least once in a quarter.
Customer growth rate accelerated each quarter. Quarterly customer growth rates last year were 5% in Q1, 10% in Q2, 14% in Q3, and 16% in Q4. The total active customers increased by about 600,000 from 20.42 million in the previous quarter. Revenue per customer was 411,600 KRW (312 USD) in Q4 last year, a 3% increase compared to the same period last year.
The number of paid members of Coupang's 'Wow Membership' was about 14 million as of the end of last year. This is a 27% increase compared to 11 million at the end of 2022. Coupang offers Wow Membership members benefits such as dawn delivery, free returns, and the online video streaming service (OTT) Coupang Play.
Kim Beom-seok, Coupang's founder, said, "Last year, we provided Wow members with record benefits and cost savings worth $3 billion (approximately 3.9162 trillion KRW)," adding, "More customers are discovering unprecedented value offered by Coupang, including products, Coupang Eats, exclusive discounts including dawn delivery, and Coupang Play streaming service."
Kim also said, "The growth in Coupang's revenue, active customers, and Wow members reflects our relentless efforts to deliver 'Wow' to customers through diverse product selection, pricing, and services," and added, "We are committed to providing higher levels of cost savings and value to Wow Membership."
Gaurav Anand, Coupang's Chief Financial Officer (CFO), said, "Our market share in Korea, where massive retail spending occurs, is only in the single digits, and Taiwan is much smaller," but added, "We are more optimistic than ever about the opportunities to continue satisfying customers and creating long-term shareholder value in 2024."
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