Coupang with Annual Sales of 22 Trillion Won Faces 'Tough Road' Between Record High Performance and Deficit Pit (Comprehensive)

Last Year Sales Surpassed 22 Trillion Won... 54% Increase Compared to Previous Year
Deficit Also at Record High... Challenge to Improve Profitability

Coupang achieved a record-breaking sales figure exceeding 20 trillion won last year, marking over 50% growth compared to the previous year. However, the scale of losses also increased significantly. This was due to aggressive investments in building logistics infrastructure. Losses from COVID-19 prevention costs and a logistics center fire were also reflected. While achieving maximum sales and rapid growth, Coupang stands at a precarious point where it could easily fall into a continuous deficit trap. Coupang has maintained an 'Amazon strategy' prioritizing economies of scale and ecosystem building despite losses, but this year it plans to actively improve profitability.

On the 3rd, Coupang announced that its sales for last year totaled $18.46372 billion. Based on the exchange rate on that day, this amounts to 22.2257 trillion won. This is a 54% increase compared to the previous year. The net loss was $1.54259 billion, equivalent to 1.8627 trillion won. Considering that the net loss was $463.157 million the previous year, the deficit has widened significantly.

◆Achieving the highest sales ever=This announcement is Coupang’s first annual performance disclosure since its listing on the New York Stock Exchange last year. Given the trend through the third quarter and the estimated payment amount on Coupang last year reaching 34 trillion won, achieving the highest annual performance was anticipated. The key was the growth in the fourth quarter. Coupang recorded sales of $5.076693 billion in the fourth quarter, a 34% increase compared to the same period last year. Coupang explained that this is the highest quarterly sales record and the growth rate is more than twice that of the domestic e-commerce market.

Coupang’s growth is the result of an increase in both the number of users and the amount spent per user. In the last quarter, the number of active customers who made at least one purchase on Coupang reached 17.94 million, nearly 18 million. This is a 21% increase from 14.85 million in the same period last year. The purchase amount per active customer also rose by more than 11% year-on-year to $283 (approximately 340,000 won). Additionally, the number of Wow Membership subscribers reached 9 million by the end of last year.

◆Largest deficit scale... challenge of improving profitability=Coupang’s net loss of $1.54259 billion last year is the largest since its founding, more than tripling compared to the previous year. Even considering the $296 million loss from the logistics center fire in the second quarter, the deficit widened. The fourth quarter net loss was $404.98 million, including $130 million in COVID-19 prevention costs. This is analyzed to be due to large-scale investments in logistics infrastructure. Coupang added 1.4 million square meters (about 420,000 pyeong) of logistics infrastructure last year alone, which is more than the total added in the previous two years combined.

However, Coupang cannot overlook the continuous accumulation of losses if it wants to enhance shareholder value. On the 2nd, Coupang’s stock price closed at $25.41, down 0.2% from the previous day. This reflects Coupang’s efforts to improve profitability, such as raising the Wow Membership fee to 4,900 won per month at the end of last year and accelerating its entry into the courier business. Garab Anand, Coupang’s Chief Financial Officer (CFO), said, "As we start this year, we are focusing on improving efficiency and operational leverage," adding, "We expect to smoothly achieve more than 2.5% growth in gross profit margin in the first quarter, which will mark the highest gross profit margin since the start of COVID-19."

Kim Beom-seok, Coupang’s founder and Chief Executive Officer (CEO), emphasized, "Coupang’s sales have nearly tripled compared to two years ago, which means Coupang’s growth potential still remains," and added, "We will continue essential innovations that have proven revolutionary customer experiences such as dawn delivery, convenient returns, and Coupang Play, which have become indispensable in customers’ lives."

This content was produced with the assistance of AI translation services.