Strong domestic performance and Taiwan expansion drive revenue gains

A Coupang delivery truck drives out of a company logistics hub in Seoul on Wednesday. (Newsis)
A Coupang delivery truck drives out of a company logistics hub in Seoul on Wednesday. (Newsis)

Korean e-commerce giant Coupang posted record quarterly revenue of over $9 billion in the third quarter, marking its third consecutive quarterly profit, driven by core business strength as well as growing momentum in Taiwan.

According to the NYSE-listed company on Wednesday, revenue for the July-September period rose 20 percent on-year on a constant currency basis to $9.3 billion, while operating income climbed 51.5 percent to $162 million.

Coupang’s product commerce segment — comprising Rocket Delivery, Rocket Fresh, Rocket Growth and Marketplace — led revenue growth, with net revenues climbing 18 percent to $8 billion.

Behind Coupang’s strong core performance is “broad-based strength across our customer cohorts,” according to founder and CEO Bom Kim.

“The resiliency of that compounding customer spend over time is a reflection of the deep investments we’ve made with an obsession to create the best customer experience,” he said during the third-quarter earnings call Wednesday. Active customers grew 10 percent on-year to 24.7 million, while revenue per active customer rose 7 percent to $323.

In a bid to expand Coupang’s customer value proposition, Kim said the company aims to broaden selection across first-party and marketplace offerings, while continuing to invest in fulfillment services to improve convenience and savings for both merchants and customers.

He also noted that automation will play a key role in boosting operational efficiency.

“We’re aggressively accelerating the deployment of automation technologies across our logistics and fulfillment network,” Kim said, adding that the automation is already improving both service levels and operating costs.

Much of the growth came from what the company calls its "developing offerings" segment, which includes Taiwan Rocket Delivery, Farfetch, Coupang Eats and Coupang Play, generating $1.3 billion in revenue, up 31 percent from a year earlier.

According to Kim, Rocket Delivery’s growth in Taiwan is yielding meaningful results, with consumers showing “higher levels of adoption and retention.”

“In Taiwan, our momentum continues to accelerate, generating exciting year-over-year and quarter-over quarter revenue growth again this quarter,” he said, underscoring that sustained growth will depend on expanding product selection and building out last-mile logistics.

While still in the early stages, Coupang is expanding its first-party assortment and recently launched its third-party marketplace there, with both expected to significantly broaden the selection for local customers.

A growing share of order volume in the region was fulfilled through the company’s own last-mile logistics network. “It creates the potential for us to approach the levels of speed and reliability that customers have come to expect from Coupang in Korea,” Kim added.

Despite strong revenue performance, losses in the developing offerings segment continued to widen.

Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, for the segment was a loss of $292 million, up $165 million from a year earlier.

The product commerce segment, by contrast, reported adjusted EBITDA of $705 million, up 50 percent on-year, with a margin of 8.8 percent, more than 200 basis points above the same period last year.

Coupang Chief Financial Officer Gaurav Anand attributed the increase to stepped-up investment in Taiwan to scale operations in the market.

“While we may continue to see periods of variability in margin expansion quarter-to-quarter, we expect that consolidated margins will continue expanding on an annual basis for the foreseeable future, inclusive of our investments into developing offerings,” he said.


minmin@heraldcorp.com