Coupang posted its highest-ever quarterly revenue this third quarter, powered by growth in Taiwan Rocket Delivery. Coupang is building a last-mile (final stage of product delivery) logistics network in Taiwan to offer service on par with Korea. Bom Kim, chair of Coupang Inc., said on the 5th during an earnings conference call that "the Taiwan market is showing a pattern similar to when we initially built our business in Korea."
Coupang Inc. disclosed to the U.S. Securities and Exchange Commission (SEC) on the 5th that it posted third-quarter revenue of 12.8455 trillion won ($9.267 billion) and operating profit of 224.5 billion won ($162 million). Compared with a year earlier, revenue rose 20% and operating profit increased 51.5%. Revenue was the highest ever for a quarter.
Net profit came to 131.6 billion won ($95 million), up 51% from a year earlier. The operating margin and net margin were 1.7% and 1%, respectively, based on revenue.
What drove Coupang's third-quarter revenue increase was Developing Offerings, which recorded revenue of 1.7839 trillion won ($1.287 billion), up 31% from a year earlier. The Developing Offerings category includes the Taiwan Rocket Delivery business as well as Farfetch, Coupang Play, and Coupang Eats. Coupang said among these, third-quarter revenue in Taiwan posted a triple-digit growth rate.
Kim said on the conference call held after the earnings release that "growth in Taiwan's Rocket Delivery is accelerating, and we posted remarkable revenue growth this quarter."
He added, "The level of customer acquisition in Taiwan is similar to the pattern seen when building out the retail business in Korea in the early days," and "our focus on building a top-tier end-to-end customer experience is prompting a meaningful response from consumers, leading to high acquisition and retention."
Coupang is expanding logistics investment in Taiwan to build Rocket Delivery infrastructure on par with Korea. Recently, the range of Rocket Delivery items has also expanded significantly, improving consumer convenience.
Kim added, "We have made impressive progress in building our own last-mile logistics network in Taiwan," and "as the share of deliveries through our in-house logistics network has increased substantially, we have laid the groundwork to get even closer to the speed and reliability customers expect from Coupang in Korea."
However, the Taiwan business is still in the early investment stage and is posting losses. Coupang Inc. recorded an operating loss of 404.7 billion won ($292 million) in the Developing Offerings category in the third quarter. Earlier, Coupang said it would invest $900 million to $950 million (about 1.29 trillion won to 1.37 trillion won) in Developing Offerings this year.
Gaurav Anand, chief financial officer (CFO) of Coupang Inc., said, "We are raising the level of investment needed to support growth in Taiwan," adding, "this shows our growing confidence in the business's potential."
Coupang's third-quarter Product Commerce segment, including Rocket Delivery, Rocket Fresh, and Rocket Growth, posted revenue of 11.0615 trillion won ($7.98 billion), up 18% from a year earlier. During the same period, active Product Commerce customers totaled 24.7 million, up 10% from 22.5 million a year earlier. Revenue per Product Commerce customer was 447,730 won ($323), up 7% year over year.
Regarding this, Kim said, "Solid growth continued across customer cohorts," adding, "this is the result of tenacious investment over a long period to create a world-class customer experience."
Kim also mentioned additional growth potential in the Korean market. Kim said, "Korea remains a solid market with significant growth potential, and it once again demonstrates our conviction that there are many growth opportunities to pursue going forward."
He added, "Expanding selection in both Rocket Delivery (1P) and the marketplace will be key to driving future growth," and "we will strengthen brand partnerships to offer customers more choice and greater convenience."
Coupang said it is also moving in earnest to introduce automation technologies across its logistics and fulfillment network. Kim said, "Automation is a powerful growth engine for both service quality and operational efficiency," adding, "a culture centered on process innovation and technology is a core pillar of Coupang's competitiveness."
Coupang recently expanded the reusable eco-bag previously used for Rocket Fresh orders to general orders. Kim said, "We are providing an experience where customers can receive items immediately without opening a box or disposing of packaging. It is a small but clear example that shows innovation, rigorous operations, and customer delight can create a virtuous cycle."
Kim said, "We will focus on areas where we are confident we can deliver sustained customer delight and generate attractive long-term cash flow."