'Coupang's Heukja Rocket Achieves Record High Sales and Four Consecutive Quarters of Profit (Comprehensive Report 2)'

‘Annual Surplus’ Achievement Signal
Accelerating Active Customer 'Flywheel' Effect

'Rocket Growth' Driving Force Opening Logistics Network for SMEs
Taiwan Market Growing Faster Than Korea... "Additional Investment Plans"

Coupang continued its rapid growth by recording record-breaking performance in the second quarter of this year. Despite consumption contraction due to high inflation and economic recession, it achieved four consecutive quarters of profit and the highest-ever sales, capturing both ‘scale’ and ‘profitability.’ This brings it one step closer to its annual profit target.

On the 9th (Korean time), Kim Beom-seok, Coupang’s founder, said at a conference following the earnings announcement, "Years of massive investment in logistics infrastructure and focus on customer experience have been the driving force behind our performance," adding, "The ‘flywheel’ effect (growing at an even faster pace) is accelerating in terms of sales and active customer numbers."

According to the earnings report submitted by Coupang to the U.S. Securities and Exchange Commission (SEC), operating profit in the second quarter reached 194 billion KRW (147.64 million USD), marking four consecutive quarters of profit. This represents a turnaround to profit compared to the same period last year and is the highest operating profit for a second quarter. It also increased by 42% compared to the previous quarter (136.2 billion KRW).

During the same period, sales amounted to 7.6749 trillion KRW (5.83788 billion USD), a 21% increase compared to 6.35 trillion KRW in the same period last year, setting a record for the highest quarterly sales ever. This contrasts with the 3% growth rate of the domestic distribution market in the second quarter. Net income was 190.8 billion KRW (145.19 million USD), turning profitable compared to the second quarter of last year. Global investment bank Goldman Sachs had projected sales of 5.653 billion USD and operating profit of 128 million USD, but Coupang exceeded these estimates.

Most importantly, the increase in active customers was a key factor in the performance improvement. Active customers, defined as those who purchased at least once in the second quarter, reached 19.71 million, a 10% increase from 17.88 million in the same period last year, approaching 20 million. Customer sales per capita also rose 5% during the same period to 389,100 KRW (296 USD).

As customer consumption increased, Coupang’s cash flow also improved significantly. Coupang posted positive free cash flow (FCF) in the second quarter following the first quarter. The trailing 12-month FCF was 1.1 billion USD, and operating cash flow was 2 billion USD. Although FCF had been negative due to proactive logistics investments, the reduction in logistics investment costs combined with improved profitability in the core business led to a significant improvement compared to the first quarter (451 million USD). The adjusted EBITDA margin was 5.1%.

Beom-seok Kim, CEO of Coupang

By business segment, the core business product commerce sector (Rocket Delivery, Rocket Fresh, Marketplace) recorded sales of 7.4694 trillion KRW (5.68159 billion USD), growing 21% compared to one year ago. Adjusted EBITDA was 396 billion KRW (302.2 million USD), showing significant growth compared to 66.17 million USD a year earlier.

Fashion, beauty, and marketplace all showed steady growth, but ‘Rocket Growth (FLC)’ was the standout. Rocket Growth opened the Rocket Delivery platform to small and medium-sized enterprises (SMEs), allowing them to use Coupang’s logistics network. This enabled SMEs to grow sales and consumers to have access to a larger number of products available for same-day or next-day delivery. Although introduced in the first quarter, it has shown explosive growth and established itself as a new growth engine for Coupang. Founder Kim emphasized, "Rocket Growth is growing at more than twice the speed of the overall business growth rate."

New business sectors such as Coupang Play, Coupang Eats, overseas business (Taiwan), and fintech recorded sales of 205.4 billion KRW (156.29 million USD) in the second quarter, a 2% decrease compared to the previous year. Adjusted EBITDA loss widened to 107.37 million USD from 31.66 million USD a year ago. This was the result of approximately 400 million USD in new business investments.

Nonetheless, the fact that the Rocket Delivery business is progressing smoothly in the Taiwan market is noteworthy. Coupang is conducting its Rocket Delivery business in Taiwan with Korean SME products, and it is growing faster than in the Korean market in the past. Considering this growth, Founder Kim announced plans for additional investment in the Taiwan market. He stated, "We have high standards for business, and investments that do not meet internal criteria are either halted or deprioritized, but Taiwan has exceeded those standards," adding, "We plan to continue high-level investments."

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