- South Korean e-commerce giant curbed spending, hiked prices
- Stock has lost half its value since last year’s New York IPO
Coupang Inc., the South Korean e-commerce giant backed by SoftBank Group Corp., posted its first operating profit on record after winning more customers and improving cost efficiency.
The third-quarter operating profit amounted to $77.4 million, compared with a loss of $315 million on that basis a year earlier, the Seoul-based company in a statement Wednesday. Net revenue climbed 10% from a year earlier to $5.1 billion, while the number of active clients rose 7%.
The shares rose 8% in extended trading in New York.
Coupang, which went public in New York last year, has adopted more technology at its distribution centers and raised the price of its monthly delivery membership to improve its profitability. The company is set to gain market share as smaller e-commerce startups struggle to raise funds in a tough market for tech stocks and venture financing, said Kim Myoung-joo, an analyst at Korea Investment & Securities.
“In 2023, Coupang’s position in the market will be solidified through an online-market shakeup,” Kim said ahead of the results. “A lot of startups are facing financial crises as they are having difficulties raising funds amid high interest rates.”
Kim expects Coupang’s online commerce market share in South Korea to rise by 3.8 percentage points to 24% next year and by 5 percentage points in 2024, projecting the company will reach annual net income in 2026.
Founder and Chief Executive Officer Bom Kim has vowed to bring Coupang to profitability by expanding its business and improving operational efficiency. Shares of the company have lost about half their value since it went public in one of last year’s highest-profile initial public offerings.
