The card the founder of Coupang, which posted more than 1 trillion won in operating losses in just the first half of this year, pulled out before investors was "Taiwan."
On Aug. 5 (Korea time), Bom Kim, chair of U.S.-based parent Coupang Inc., devoted more than half of his opening remarks on the second-quarter earnings conference call to new businesses such as Taiwan dawn delivery, Coupang Eats' expansion into nonfood delivery, and Japan's RocketNow. He briefly mentioned and moved past the record operating loss of 835 billion won disclosed that day. The industry interpreted this as an attempt to shift the market's attention from profitability metrics to a growth narrative.
Coupang Inc. disclosed that in the second quarter it recorded revenue of 13.3007 trillion won ($8.856 billion) and an operating loss of 835 billion won ($556 million). Revenue rose 4% (10% at constant currency), but operating profit swung to a loss. It is the largest quarterly loss since its 2021 New York Stock Exchange listing. Adding the first quarter (354.5 billion won), the first-half cumulative operating loss is 1.1895 trillion won.
◇ Bom Kim: "Dawn delivery took 4 years in Korea, 1 year in Taiwan"
What Kim repeatedly emphasized as he explained Taiwan was "speed." He said, "It took four years from the start of our logistics journey to launch dawn delivery in Korea, but we achieved it in Taiwan in just one year," adding, "That's because Taiwan didn't start from a blank slate; it is the result of inheriting the technology, operating manuals, and delivery 'playbook' accumulated over more than 10 years in Korea." He stressed that most delivery volume in Taiwan is currently handled as seven-day-a-week next-day delivery, and that Coupang is the only company in Taiwan offering such a service.
He also highlighted that Korea's success formula is being replicated as is. He said, "In Korea, even our longest-tenured customer cohort, acquired 15 years ago, spends nearly 10 times more than in their first year, and the same trend is appearing in Taiwan," adding, "As we resolve supply chain inefficiencies and volume grows, Taiwan's profit-and-loss structure will follow the path Korea pioneered."
He presented Coupang Eats as a case already validated. Kim said, "The cycle is complete when a service stops drawing funds from the portfolio and starts supplying funds to the portfolio," adding, "Coupang Eats has gone through that entire process." In other words, the new business has moved past the stage of using money from the core and has risen to the stage of supporting other new businesses. He also said, "If you combine Coupang Eats and Japan's RocketNow, we have secured a sustainable business structure."
◇ Shock foretold, market focuses on single-digit growth
Some say this message management was needed because growth, more than profitability, is the more painful part. A large portion of this loss was a one-off expense that had been flagged. The $410 million penalty surcharge from the Personal Information Protection Commission was finalized in June, and the market had already priced it in; excluding it, adjusted operating loss shrinks to $146 million (about 219.3 billion won), or about one-quarter.
What the market actually focused on was a different number. Product commerce (Rocket Delivery, Rocket Fresh, Rocket Growth, and Marketplace), which accounts for more than 80% of company revenue, posted $7.425 billion in revenue, up just 8% at constant currency. That is less than half the 18% growth rate in the third quarter of last year, before the massive personal data leak. The company's outlook for consolidated revenue growth in the third quarter is also 8% to 9%. That means a rebound will be difficult in the second half as well. Coupang Inc. shares closed at $16.78 on the 4th (local time), up 2.19% from the previous session, but fell into the 7% range in after-hours trading following the earnings release.
Kim defended this number from a different angle. Excluding customers who left during the incident and have not yet returned, spending by the remaining customers rose 16% year over year, nearing pre-incident levels, he said. Active customers recovered to 24.7 million, the level just before the incident, and the number of Wow membership subscribers "has surpassed pre-incident levels," he said. Looked at another way, however, some customers who have not returned are dragging down the growth rate. Structurally, it will inevitably take time to regain past growth rates in the domestic market. That is also why Kim spoke at length about Taiwan.
Taiwan is still a money-consuming side as well. In the growth businesses segment, which includes Taiwan, Coupang Eats, and Farfetch, second-quarter revenue was $1.431 billion, up 24% at constant currency, but adjusted EBITDA loss was $219 million. Gaurav Anand, chief financial officer (CFO), projected this segment's loss for the year at $950 million to $1 billion, saying, "The biggest reason is long-term investment to build the Taiwan retail business."
In the end, with domestic growth slowing, Coupang has entered a phase in which it must keep putting money overseas. In the third quarter, additional one-off expenses, including losses from the Incheon logistics center fire, are also expected to be reflected. The timing presented by CFO Anand for product commerce margin recovery is mid-2027.