As Coupang posted an operating loss in the 350 billion won range in the first quarter amid the fallout from a massive personal data leak, Naver (NAVER) is accelerating its chase by advancing its commerce services. While Coupang's profitability deteriorated due to compensation expense and temporary logistics network inefficiencies, Naver logged record first-quarter sales on the back of growth in its services, including Naver Plus Store, membership, and N Delivery.
According to a first-quarter consolidation report filed with the U.S. Securities and Exchange Commission (SEC) by Coupang Inc., Coupang's operating loss for the first quarter came to $242 million (about 354.5 billion won). It swung to a loss, marking the largest quarterly loss in about four years and three months since the fourth quarter of 2021.
During the same period, revenue was $8.504 billion (about 12.4597 trillion won), up 8% from a year earlier. While top-line growth continued, the growth rate fell to single digits for the first time since its New York listing in 2021. The previous lowest quarterly revenue growth rate was 14% in the fourth quarter of last year.
By contrast, Naver lifted both revenue and profitability. Naver's first-quarter revenue was 3.2411 trillion won and operating profit was 541.8 billion won, up 16.3% and 7.2%, respectively, from a year earlier. It was the first time since its founding that quarterly revenue surpassed 3 trillion won, and operating profit was also a record for a first quarter.
In particular, revenue in the services institutional sector, including commerce such as shopping and membership, rose 35.6% to 434.9 billion won from a year earlier. As the commerce ecosystem spanning Naver Plus Store, membership, and N Delivery took hold, some of the customers who left Coupang appear to have been absorbed, analysts said.
Coupang's growth slowdown stems from a combination of customer churn and operational burdens following the large-scale personal data leak late last year. Active customers in the first quarter announced that day totaled about 23.9 million, up 2% from a year earlier, but down 700,000 (about 2.8%) from 24.6 million in the fourth quarter of last year.
This is seen as the result of the spread of the "Talpang" (leaving Coupang) movement. Seo Yong-gu, a professor in the business administration department at Sookmyung Women's University, said, "Since the information leak incident, Coupang likely faced burdens on management and operations for a period as related investigations and inspections continued."
Industry watchers say that if Coupang's growth slowdown and profitability deterioration continue, the market share gap with Naver could narrow further. The gap between the two is estimated to be small based on transaction volume.
According to WiseApp Retail, the total transaction volume in 2024 is estimated at 55.0861 trillion won for Coupang and 50.3 trillion won for Naver. Converted to the 242 trillion won in 2024 online shopping mall transaction volume compiled by the Ministry of Data and Statistics (MODS), market shares are about 22.7% for Coupang and 20.7% for Naver.
◇ Naver's N Delivery to counter Coupang's Rocket Delivery
Naver is strengthening delivery competitiveness by increasing the share of N Delivery in response to Coupang's Rocket Delivery. N Delivery is a service that breaks down estimated arrival times and delivery options by product so consumers can choose fast delivery within Naver Shopping. It is segmented into services such as same-day delivery, next-day delivery, Sunday delivery, dawn delivery, and preferred-date delivery.
Naver plans to expand N Delivery coverage, currently below 20%, to 25% this year and to more than 50% within three years. To that end, it is also considering direct investment in logistics facilities and more. In the second half, it is preparing to introduce unlimited free shipping linked to the Naver membership.
Naver is also strengthening its fresh food delivery competitiveness through collaboration with Kurly. The two companies entered into a strategic partnership in Apr. last year and opened "Kurly N Mart," an online grocery specialty zone, in Naver Plus Store in Sep. of the same year. Currently, Kurly's logistics subsidiary Kurly Nextmile is also handling "Dawn Delivery" for products from Naver Smart Store and Brand Store.
Naver also decided to participate in Kurly's 33 billion won third-party allotment paid-in capital increase and acquire all of the new shares to be issued. With this investment, Naver's equity stake in Kurly will expand to 6.2%, and the strategic cooperation between the two companies is expected to be further strengthened.
An industry official said, "Because Coupang has grown based on logistics centers and direct-purchase inventory, any slowdown in demand inevitably increases the expense burden," and added, "Naver is expanding N Delivery on a platform fee model and reinforcing fresh food delivery through collaboration with Kurly, so the pace of its pursuit of Coupang will also quicken."