In Q1, Coupang Users Spent 130,000 KRW Per Person Per Month

Coupang's Active Customers Exceed 19 Million in Q1
Up About 900,000 from 18.11 Million at Year-End
Sales per Customer 389,000 KRW, Up 8%... Impact of High Inflation

The number of customers who purchased products at least once on Coupang in the first quarter of this year (active customers) exceeded 19 million. Considering that sales during this period were about 7.4 trillion KRW, Coupang users in the first quarter spent approximately 130,000 KRW per person per month on Coupang. This result is attributed to an increase in consumers seeking online channels with relatively competitive prices amid high inflation and ongoing purchasing burdens for daily necessities, as well as Coupang expanding benefits for its paid membership.

On the 10th, Coupang announced in its first-quarter earnings report that the number of quarterly active customers surpassed 19 million for the first time in history. This is an increase of about 900,000 from 18.11 million at the end of last year in just three months. Coupang’s quarterly active customers had maintained around 18 million throughout last year but showed a noticeable rise in the first quarter of this year. Customer sales per person in the first quarter also increased by 8% year-on-year to $305 (approximately 389,050 KRW). This means that each customer spent about 130,000 KRW per month on Coupang.

[Image source=Yonhap News]

Amid ongoing inflation pressures, with consumer price inflation rates of 4-5% monthly in the first quarter, consumers paid attention to Coupang’s competitive prices and wide product range. It is also evaluated that Coupang’s strengthening of discount benefits for paid membership 'Wow Membership' holders and the rising popularity of Coupang Play, an online video service (OTT), contributed to this trend. As of the end of last year, Wow Membership had 11 million members. For a monthly fee of 4,990 KRW, members can enjoy free Rocket Delivery, 30-day free returns, free Rocket Fresh delivery, free Rocket Direct Purchase delivery, Wow-exclusive discounts, and OTT Coupang Play. Coupang founder Kim Beom-seok emphasized in the first-quarter earnings conference call that "the trend of customer growth has fully resumed."

Coupang recorded sales of 7.399 trillion KRW and an operating profit of 136.2 billion KRW in the first quarter. Both sales and operating profit were the highest ever on a quarterly basis. Founder Kim said, "Despite the overall downturn in the retail market, Coupang’s continued growth is because it provides an experience that contrasts with the limited product range and high prices customers face in offline retail."

One factor contributing to the increase in active customers was the growth in Rocket Delivery products. As open market sellers stock products, Coupang manages inventory, delivery, and returns through 'Rocket Growth,' which has increased inflows. Over the past year as of the first quarter, sales through Rocket Growth increased by 90%. This accounts for 7% of Coupang’s first-quarter sales and 4% of total sales volume.

The popularity of Coupang’s private brand (PB) products offered at prices lower than inflation, category-specific discount events offering up to 50-80% off, and additional 10-30% discounts for Wow Membership holders are also analyzed to have contributed to the expansion of users.

The increase in Coupang Play viewers also had a positive effect. According to Mobile Index, Coupang Play’s monthly active users (MAU) rose from about 4.01 million in February to about 4.29 million in April, ranking it second among domestic OTTs. The number of new installations in April was 488,593, higher than TVING (370,239) and Netflix (284,049).

Professor Kim Dae-jong of Sejong University’s Department of Business Administration said, "In the current 600 trillion KRW distribution market, the share of online distribution is expected to grow to 65% in South Korea, where smartphone penetration is high. Accordingly, the number of (Coupang) customers is likely to increase."

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