SoftBank-backed Coupang posts 1st-ever annual profit in 2023

South Korea’s leading e-commerce platform Coupang Inc. on Wednesday posted its first-ever operating profit of $473 million in 2023, driven by double-digit sales growth due to an active base of customers and paid memberships for quick delivery and streaming content.

Total net revenue at the SoftBank-backed retailer jumped 20% to $24.4 billion in 2023 from a year earlier.

On a quarterly basis, operating profit shot up 51% on-year to $130 million in the October-December period last year, marking its sixth consecutive quarter of profits. It chalked up its first-ever quarterly profit in the third quarter of 2022.

“Customers are increasingly turning to WOW membership … from exclusive discounts on retail products and (Coupang) Eats to free Dawn Delivery and unlimited (Coupang) Play content streaming…,” said Bom Kim, founder and chief executive of Coupang.

WOW is Coupang’s subscription fee-based program. The New York Stock Exchange-listed retailer offers discounts on food delivery for its WOW members and access to its over-the-top streaming platform.

The WOW membership program had 14 million paid members at the end of 2023, a 27% gain on-year.

The number of active customers surpassed 21 million in the fourth quarter, 16% on-year growth. "Active customer" refers to individual customers who have ordered at least once directly from Coupang during the relevant period.

It sees more growth potential in both South Korea and Taiwan.

“We see even greater opportunity in front of us as we represent just a single digit share of the vast retail spend in Korea,and even smaller in Taiwan," said Gaurav Anand, chief financial officer of Coupang, in its fourth-quarter earnings report.

Founded in 2010, Coupang ventured into Taiwan in 2022, its first overseas market.

PRODUCT COMMERCE SEGMENT

Its core Product Commerce segment posted $23.6 billion in net revenue last year, up 18% on-year. The division’s adjusted EBITDA, or EBITDA excluding one-off, irregular and non-recurring items, came in at $1.5 billion with a margin of 6.5%.

In the fourth quarter of last year, it raked in its largest-ever quarterly net revenue of $6.6 billion, a 20% increase from the year prior. Its adjusted EBITDA was $444 million with a margin of 7.1% in the quarter.

DEVELOPING OFFERINGS SEGMENT

Net revenue at the Developing Offerings segment, which manages food delivery app Coupang Eats, fintech platform Coupang Pay, OTT platform Coupang Play, and its business in Taiwan, climbed to $789 million in 2023, a 26% gain on-year.

In the quarter that ended in December 2023, the division's revenue doubled to $273 million, compared to the year-earlier period.

But its adjusted EBITDA remained negative at $150 million in 2023, compared to negative $55 million in the year prior.

Write to Young Chan Song at 0full@hankyung.com
 

Yeonhee Kim edited this article.