Annual Sales Reach 41.29 Trillion Won, Up 29% Year-on-Year
First Domestic Distribution Company to Surpass 40 Trillion Won
Operating Profit at 602.3 Billion Won, Down 2.4% from Previous Year
Impact of Fair Trade Commission Fine and Ordinary Wage Costs Reflected
"Customer-First Innovation and Investment to Continue"
Coupang continued its steady growth last year, surpassing 40 trillion won in annual sales for the first time ever among domestic distribution companies. Its core business, led by Rocket Delivery, performed well in Korea, and it also achieved results overseas with its global online luxury platform and Taiwan membership. Kim Beom-seok, Chairman of Coupang Inc., said, "Our growth story is expanding beyond Korea to the world," adding, "We believe the playbook (success manual) created in Korea can be successfully applied in other markets as well."
The First Distribution Company to Surpass 40 Trillion Won in Annual Sales
Coupang Inc., the parent company of Coupang and a listed company on the New York Stock Exchange, announced on the 26th that its sales last year reached 41.2901 trillion won (30.268 billion USD), a 29% increase compared to the previous year (31.8298 trillion won / 24.383 billion USD). This means it raised its sales by nearly 10 trillion won within a year after surpassing 30 trillion won in annual sales in 2023.
Annual sales exceeding 40 trillion won is a first among distribution companies operating in Korea. Last year, Coupang's sales exceeded the combined sales of E-Mart (29.0209 trillion won) and Shinsegae Group (6.5704 trillion won), which totaled 35.5913 trillion won, and were 2 to 3 times higher than Lotte Shopping (13.9866 trillion won) and CJ CheilJedang, the top food company (17.871 trillion won).
Coupang's operating profit last year was 602.3 billion won (436 million USD), a 2.4% decrease compared to the previous year (617.4 billion won / 473 million USD). Following the first annual operating profit achieved in 2023, it maintained profitability for two consecutive years, though the profit scale decreased. This performance is considered commendable amid the worst domestic demand slump, reflecting a fine imposed by the Fair Trade Commission of 162.8 billion won in Q2 last year and accounting costs (about 40.1 billion won) related to the Supreme Court's ruling on ordinary wages.
Sales in the fourth quarter of last year reached 11.1139 trillion won (7.965 billion USD, quarterly average exchange rate 1,395.35 won), a 28% increase compared to the same period last year, marking the highest quarterly sales ever. Operating profit for the same period rose 154% to 435.3 billion won. Coupang explained that insurance proceeds of 244.1 billion won related to the fire at the Deokpyeong logistics center in 2021 were reflected in the fourth quarter operating profit.
Kim Beom-seok: "Beyond Korea to the World"... Coupang Advances in Cross-Border e-Commerce (CBEC)
Looking at the business segments, the online luxury platform Farfetch, which has expanded to 190 countries worldwide, Taiwan Rocket Delivery, Coupang Eats, Coupang Play, and other developing offerings recorded sales of 4.8808 trillion won (3.569 billion USD) last year, more than quadrupling from 1.029 trillion won the previous year, driving overall sales growth.
Sales of these developing offerings in the fourth quarter last year reached 1.5098 trillion won (1.082 billion USD), a 319% increase from 360.1 billion won (273 million USD) the previous year. Product commerce, including Rocket Delivery, Rocket Fresh, Rocket Growth, and Marketplace, also grew 16% year-over-year in the fourth quarter to 9.6042 trillion won (6.883 billion USD). Notably, Farfetch, acquired by Coupang Inc. early last year, achieved an adjusted EBITDA profit of 41.8 billion won (30 million USD) for the first time in Q4. This highlights Coupang's potential to grow beyond the domestic e-commerce market into a cross-border e-commerce (CBEC) operator. CBEC is a business model that sells products to customers worldwide based on an e-commerce platform.
During the earnings conference call, Chairman Kim emphasized the achievements of Farfetch and Taiwan, noting, "Taiwan Rocket Delivery's net sales in Q4 last year grew 23% compared to the previous quarter, and Farfetch, which used to incur losses exceeding 100 million USD (about 140 billion won) per quarter a year ago, also achieved an important turnaround." He added, "Our growth story is expanding beyond Korea to the world," and "We believe the playbook (success manual) created in Korea can be successfully applied in other markets as well."
"Early Morning and Same-Day Delivery Increased by 45%... Next Innovation is AI and Robotics"
As services for customer convenience were strengthened, the number of users also increased. The number of active customers, defined as those who purchased products at least once per quarter on Coupang, reached 22.8 million, a 10% increase from 20.8 million the previous year. Revenue per customer also rose 6% to 446,500 won (320 USD).
Chairman Kim said, "We attempted significant changes to upgrade fulfillment and logistics processes, and in Q4 last year, we were able to increase same-day or early morning delivery by nearly 45%," adding, "We also extended the order cutoff time for same-day delivery by two hours." He further noted, "Including the recent launch of early morning delivery in Jeju Island, early morning and fresh food delivery have been introduced to more islands and mountainous areas in Korea," emphasizing, "This allows customers to place orders by midnight and receive free delivery by 7 a.m."
This year, Coupang plans to continue prioritizing customers with innovation and investment. The key drivers for operational efficiency highlighted by Chairman Kim are artificial intelligence (AI) and robotics. He stated, "From robotics used in the network to AI performing trillions of daily predictions, these will be the next wave of innovation," emphasizing, "They will drive higher levels of growth and profit expansion over the coming years." He added, "Although we doubled the proportion of automated fulfillment and logistics infrastructure last year to simplify operations, the share of highly automated infrastructure still accounts for only the low teens percentage of the total infrastructure," noting, "There remains a 'huge runway' to harness the tremendous potential of automation."
Additionally, to expand overseas business, Coupang launched the same Wow Membership in Taiwan as in Korea. The plan is to increase active users through Wow Membership and target the local distribution market worth 200 trillion won. Coupang has invested 500 billion won so far in building the local Rocket Delivery logistics system in Taiwan.
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