Muristek
Coupang Inc. founder and CEO Kim Bom-seok
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 three-fold.Coupang announced on Thursday its annual sales revenue and operating loss surged to an all-time record in 2021. With that, the startup has exceeded the country’s largest retailer e-mart in sales for the first time ever.Last year’s consolidated sales among E-Mart, E-Mart Traders, and No Brand recorded 16.45 trillion won ($13.6 billion.) An online mall that houses the three affiliates of the Shinsegae Inc. posted $1.5 trillion in sales.The record sales figure for Coupang comes on the back of increased user base due to the COVID-19 induced stay-at-home measures and the wider adoption of teleworking at South Korean companies. In Q4 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 since 2019. To put the number into perspective, one out of every two online shoppers in South Korea have spent money on Coupang.
Rocket Fresh is a delivery option for fresh produce offered by CoupangThe average purchasing amount per head has also increased by 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, the subscribers to the Wow membership also has 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's distribution center in Icheon after June 2021 fireCoupang explained 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,” company’s CFO Gaurav Anand said, adding that the gross profit margin ratio rose more than 2.5% point in Q1 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 4900 won for new users. The existing users still pay only 2900 per month but that fee is also exepcted to increase in the near future. By Yoo-Chung Rohyjroh@hankyung.comJee Abbey Lee edited this article.