Coupang’s Q3 sales hit all-time high amid slowing consumption, high prices

[Courtesy of Coupang]

South Korean e-commerce giant Coupang Inc. posted record sales in the third quarter of 2023 despite the slowing consumption in the local economy due to high prices and high interest rates.

The company also posted a positive operating profit for the third consecutive quarter this year, moving closer to achieving its first annual profit since its founding in 2010. The number of its customers also exceeded 20 million for the first time.

Coupang, listed on the New York Stock Exchange, announced Wednesday that its third-quarter operating profit was 87.48 million won, up 13 percent from the same period in 2022.

This marks the fifth consecutive quarter for Coupang to post a positive operating profit since the third quarter of last year. This year, the company has been in the black for three quarters straight.

The cumulative profit for the first three quarters this year totals $341.9 million, putting the company on track to achieve its first full-year profit.

Third-quarter sales increased 21 percent to $6.18 billion, topping 8 trillion won for the first time in the company’s history. Net income gained 1 percent to record $91.3 million.

By business segment, sales from Product Commerce, which includes the company’s core businesses such as Rocket Delivery, Rocket Fresh, Marketplace, and Rocket Growth, rose 21 percent to $5.97 billion.

The company’s developing offerings, including Coupang Eats, Coupang Pay, and overseas business in Taiwan, also exhibited strong growth, with sales up 41 percent to $217.52 million.

Food delivery platform Coupang Eats has seen steep growth since providing a 5 to 10 percent discount to its WOW members in April, with transaction volume nearly doubling. At this rate, the platform is expected to account for more than a 20 percent share in the food delivery market by the end of 2023.

“Considering that only about 20 percent of our WOW membership (about 11 million) has used Coupang Eats so far, we believe there are plenty of growth opportunities ahead,” Bom Kim, founder and board chair of Coupang, said during the third-quarter earnings call.

Coupang’s business in Taiwan, its first overseas market, is also well on track.

Rocket Delivery in Taiwan, launched in October 2022, is growing at a higher rate than in Korea in its first year. Observers note that the Coupang application will be the most downloaded app of the year in Taiwan.

Non-operational metrics also remained strong.

The number of active customers, or those who have purchased a product on Coupang at least once, hit 20.42 million, up 14 percent from 17.99 million in the third quarter last year. It is the highest growth since the Covid-19 pandemic.

Sales per active customer also increased 7 percent to $303 from $284. Coupang attributed the increase to higher customer engagement through expanded WOW membership benefits, as well as significant expansion of product categories in Rocket Delivery.

Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 22 percent to $238.67 million.

“After years of unparalleled investment, enhancing our customers’ shopping experience, and focusing on operational excellence, we continue to deliver solid growth and profitability,” Kim said.