Coupang wraps up 2021 with record sales of $18.4 bn 

South Korea’s e-commerce juggernaut Coupang Inc. posted $18.4 billion in sales last year, up 54% on-year. Compared to the pre-pandemic level in 2019, the figure has jumped threefold.

Coupang announced on Thursday that both its annual sales revenue and operating loss surged to all-time records in 2021. 

With that, the startup has exceeded the country’s largest retailer Emart in sales for the first time ever.

Last year’s consolidated sales among Emart, Emart Traders, and No Brand recorded 16.45 trillion won ($13.6 billion). 

The online mall that houses the three affiliates of Shinsegae Inc. posted $1.5 trillion in sales.

The record sales figure for Coupang comes on the back of an increased user base due to the pandemic-induced stay-at-home measures and the wider adoption of teleworking at South Korean companies. 

In the fourth quarter of 2021, about 17.9 million users purchased at least one product from Coupang, 3 million more than in the same period the year prior. The figure has been increasing by 3 million annually since 2019. 

To put the number into perspective, one out of every two online shoppers in South Korea has spent money on Coupang.

The average purchasing amount per head has also increased 11% on-year from $256 to $283 in 2021.

Late last year, some 9 million users subscribed to Coupang's Wow membership, a premium plan for overnight and next-day delivery. That means even a purchase worth a dollar or less can be delivered and returned free of charge.

As of late 2020, subscribers to the Wow membership also have access to a streaming platform dubbed Coupang Play.

“Customers now spend about 30% more than they used to back in 2010. Coupang’s potential is limitless,” said the company’s founder and CEO Kim Bom-seok.

RECORD LOSS 

Not everything was peachy keen, however.

The e-commerce giant’s operating loss widened to a record high of $1.49 billion, replacing the previous bottom in 2018.

Net loss came to $1.5 billion, hit by a $296 million loss from the fire that destroyed the Icheon distribution center last June and increased spending on new facilities. 

Coupang explained that the company went all-in on expanding its delivery network amid intensifying competition in the e-commerce sector. Last year alone, the e-commerce provider expanded its logistics infrastructure size by 1.4 million square meters.

Currently, 70% of the South Korean population lives within 10 km of a Coupang distribution center.

The 12-year-old company has also strengthened its digital logistics capabilities for predicting the selection and amount of items that would sell at a given period of time, based on big data and AI analytics.

Injection of funds into new businesses like Coupang Eats and Coupang Play, as well as the cost of preventative measures against COVID-19 contributed to the loss. 

“For this year, we will focus on improving the profit margin,” the company’s CFO Gaurav Anand said, adding that the gross profit margin ratio rose more than 2.5% points in the first quarter to the highest level since the pandemic.

The company forecasts the adjustments to membership fees to contribute to the overall profitability. 

Last December, Coupang raised the membership fee to 4,900 won for new users. The existing users still pay only 2,900 per month but that fee is also expected to increase in the near future. 

Write to Yoo-Chung Roh at yjroh@hankyung.com
Jee Abbey Lee edited this article.