Korean e-commerce Coupang logs profits in Q3-Q4 2022

South Korean e-commerce giant Coupang Inc. achieved record-high yearly revenue and operating profits for two consecutive quarters between July to December last year.

The New York Stock Exchange (NYSE)-listed company posted 26.59 trillion won ($20.2 billion) in 2022 revenue, up 26% on-year. Its fourth-quarter revenue came to 7.24 trillion won, 21% higher than a year ago, according to its US Securities and Exchange Commission (SEC) filing on Feb. 28.

The company logged 113.3 billion won in the fourth-quarter operating profit, similar to 103.7 billion won in the third quarter. But it failed to swing to the black, posting a 144.7 billion won operating loss for the full year.

Founded in 2010, Coupang has rapidly grown up to compete with Korean conglomerate affiliates such as E-mart Inc. and Lotte Shopping Co.

Coupang’s size has enormously expanded since 2014 when it started offering its flagship Rocket Delivery service in Korea, which allows customers to receive daily necessities and groceries ordered even late the previous day.

Backed by its huge success in Korea, Coupang entered Japan and Singapore in 2021 and launched its ultra-fast delivery service in Taiwan last year. Now, the company is aiming to become the top retailer in Asia.

SHINSEGAE TO WIDEN GAPS VIA SUBSCRIPTION

Coupang’s growth over the past decade is unprecedented. 

Retail conglomerate Shinsegae Group, the parent of supermarket chain E-Mart, posted 30.46 trillion won revenue from its nine retail affiliates, excluding a duty free shopping unit.

Coupang’s 2022 revenue followed Shinsegae Group, outperforming 15.48 trillion won from Lotte Shopping and Hyundai Department Store Group’s 26 trillion won.

Market watchers are expecting that the rivalry between Shisegae and Coupang will be intensified this year as the former is set to launch a monthly subscription service. The subscription will strengthen Shinsegae's lock-in strategy in purchasing products of the group affiliates, such as Shinsegae Duty Free, Starbucks Korea, Gmarket and SSG.COM

The group aims for 4 million subscribers this year. Coupang has more than 11 million subscribers to its Wow service, which for 4,990 won a month offers free-of-charge deliveries and returns and access to the over-the-top (OTT) streaming platform Coupang Play, as of end-2022.

Also, Shinsegae affiliates will strengthen their core business to further widen the gaps between them and Coupang. Gmarket aims to outperform Coupang as an online open market platform; SSG.COM is set to focus on fashion, beauty and grocery which Coupang is relatively slow.

“The competition in the e-commerce industry will be fiercer. The top online portal platform Naver Corp. is dominating the local market of independent sellers; tech giant Kakao Corp. is slated to combine its entertainment and commerce businesses. Other mid-sized e-commerce platforms such as TMON Inc. and WeMakePrice Inc. are also active in the market,” an industry source said.

“According to market research firm Euromonitor, Coupang made up only 4.4% of the 602 trillion won-worth Korean retail market last year,” said Coupang CEO Kim Bom-seok (Bom Kim) during the 2022 earnings conference call on Tuesday.

“We will grow our market power to offer more convenience to consumers in terms of variety of products and reasonable prices. This is what we can do much better than the offline retail giants, which have dominated the market,” the CEO added.

Write to Dong-Hui Park at donghuip@hankyung.com

Jihyun Kim edited this article.