Kim Beomseok Issues First Verbal Apology: "We Failed To Meet Customer Expectations"...Coupang Falls Just Short Of 50 Trillion Won In Annual Revenue (Comprehensive)

Profitability deteriorates in Q4 amid fallout from data leak
Chairman Kim: "We will undoubtedly do better"

Coupang recorded its highest-ever annual revenue last year, exceeding 49 trillion won. Although it fell short of reaching 50 trillion won due to the impact of a large-scale personal information leak that occurred ahead of the year-end peak season, the company maintained double-digit growth. Bom Kim, Chairman of the Board of Coupang Inc., issued his first verbal apology since the personal information leak, stating, "We failed to meet our customers' expectations."

On the 27th, following the release of Coupang Inc.'s annual results, Chairman Kim said during a conference call, "Once again, I would like to apologize for the concerns and inconvenience caused by this incident." While he had previously delivered a written apology through the company in December last year, this was his first time issuing a statement verbally.

He emphasized, "Coupang has so far focused on the single goal of 'customer delight.' Customers are the only reason we exist, and we strive every day to earn their trust." He continued, "There is nothing more serious than failing to meet customer expectations at Coupang. We fully understand the need to do better, and we are committed to making it happen."

On this day, Coupang Inc. disclosed that last year's revenue reached $34.534 billion (approximately 49.1197 trillion won), a 14% increase from the previous year's $30.268 billion (about 41.2901 trillion won). This is the highest revenue in Coupang Inc.'s history. It surpasses the combined revenue of offline retail giants Emart (28.9704 trillion won) and Shinsegae Group (6.9295 trillion won), which together earned 35.8999 trillion won last year, and is about three to four times greater than Lotte Shopping (13.7384 trillion won) or CJ CheilJedang, the top player in the food industry (17.7549 trillion won).

During the same period, operating profit also increased by 12.7% to $473 million (approximately 679 billion won), but the annual operating margin slipped slightly from 1.46% to 1.38%. This is attributed to the deterioration in fourth-quarter results, which included November and December of last year when the personal information leak affecting Korean users was announced. In the fourth quarter, Coupang Inc.'s revenue was $8.835 billion (about 1.281 trillion won), up 11%, but operating profit plummeted by 97% to $8 million (about 1.15 billion won) compared to $312 million (about 43.53 billion won) in the same period a year earlier. Net loss for the quarter was $26 million (about 3.77 billion won), a reversal from a net profit of $131 million (about 18.27 billion won) in the same period last year. The operating margin for this period was 0.09%.

A view of a Coupang logistics center in downtown Seoul. Photo by Yonhap News

Notably, fourth-quarter revenue was 5% lower than the previous third quarter's $9.267 billion (about 1.28455 trillion won). While Coupang Inc.'s dollar-denominated revenue has previously declined quarter-over-quarter since its 2021 listing, this was the first time that revenue in won declined compared to the previous quarter. Coupang Inc. stated, "We estimate that the personal information incident has had a negative impact on fourth-quarter revenue growth rate, active customer count, WOW membership, and profitability since December last year." In fact, the number of active customers in the Product Commerce segment—defined as customers who made at least one purchase during the quarter—was 24.6 million in the fourth quarter of last year, a decrease of 100,000 from 24.7 million in the previous quarter. Coupang Inc.'s Chief Financial Officer, Gaurav Anand, commented, "It appears to be related to the personal information incident," but added, "However, things have stabilized since the fourth quarter, with many customers reactivating their accounts and a recovery in customer growth."

Breaking it down, annual revenue from Product Commerce—including Rocket Delivery, Rocket Fresh, Rocket Growth, and Marketplace—was $29.592 billion (about 42.0869 trillion won), an 11% increase from the previous year. Revenue from growth businesses such as Taiwan and Farfetch rose 38% to $4.942 billion (about 7.0326 trillion won). However, annual adjusted EBITDA loss in the growth business segment was $995 million (about 1.4137 trillion won), a 58% increase from the previous year, indicating continued aggressive investment.

Chairman Kim stated, "We are introducing a higher level of innovation and automation throughout operations with the goal of improving customer experience and reducing service costs." He further pledged, "We will continue to make aggressive investments, including in Rocket Delivery, to meet demand without compromising customer experience or long-term scalability." He also added, "Coupang promises to work closely with government authorities as a constructive partner."

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