Coupang’s Q1 revenue up; quarterly dip signals rising competition

Coupang Inc., South Korea’s largest e-commerce platform, extended its year-on-year sales growth with an 11.1% increase to post $7.9 billion in first-quarter revenue. The growth was led by its Taiwanese operations, food delivery app Coupang Eats, and online luxury mall Farfetch, according to its regulatory filing on Wednesday.

Revenue dipped 0.7% from the previous quarter, however, snapping a nearly three-year consecutive growth streak and highlighting growing competition from Chinese online retailers such as AliExpress and Temu, as well as weakening consumer sentiment.

Since the fourth quarter of 2024, Coupang, listed on the New York Stock Exchange, has experienced a moderation of its sales growth. Quarter-on-quarter revenue growth slowed to the 3% range in the October-December period of last year, compared to the 6% range seen in the two preceding quarters.

It is also markedly less than the 9.1% on-quarter growth in the fourth quarter of 2023.

The Korean won's weakness contributed to the quarterly sales decline, as Coupang translated sales into dollars for financial reporting.

USER COUNT

Even as user numbers are stagnating, the recent entry of Chinese e-commerce player JD.com, also known as Jingdong, delivered another blow to Coupang.

Coupang’s user base fell 0.65% to 33.39 million in April from the previous month, though it was still up 1% compared to January.

In 2024, Koreans bought 4.29 trillion won ($3.1 billion) worth of goods on the apps of AliExpress and Temu, according to payment settlement data from Wiseapp, an online and retail data tracker. That represents an 84% surge from 2023.

DELIVERY SERVICES

To challenge Coupang’s dominance, Naver Corp., Korea’s No. 1 online portal operator, has beefed up its delivery services. In March, it launched Naver Delivery, an arrival guarantee service offering free delivery and returns for paid members, emulating Coupang’s WOW membership program.

“With e-commerce players engaged in cutthroat competition to counter Coupang, weakening consumer sentiment is inevitably leading to a decline in sales,” said a retail industry official.

BUSINESS IN TAIWAN

In the first quarter, Coupang posted $154.0 million in operating profit, an increase of $110 million. Revenue from Coupang Taiwan, CoupangEats and Farfetch shot up 78% on-year in the first quarter in aggregate.

“The number of products available on Coupang Taiwan soared nearly 500% in the first quarter (compared to a year before),” said Bom Kim, founder and chief executive of Coupang, during an earnings call on Wednesday. “Our continued investment in Taiwan reflects our strong belief in success there.”

He pledged to continue investing, saying: “To stay competitive in this dynamic business environment, we need to keep innovating and investing.”

Write to Tae-Ung Bae at Btu104@hankyung.com
 

Yeonhee Kim edited this article.