COUPANG posted its first loss in two years, after the acquisition of unprofitable Farfetch Holdings and a government regulatory fine offset strong growth in its core e-commerce business.
South Korea’s largest online retailer posted a net loss of US$77 million for the June quarter, versus an average estimate for a loss of US$11.7 million. Excluding Farfetch and a fine from the Korean authorities, Coupang’s second-quarter net income came to about US$124 million, it said.
The shares fell more than 5 per cent in late US trading.
The losses overshadowed resilient top-line growth. It reported a net revenue increase of 25 per cent to US$7.3 billion. Shares in Coupang, which popularised one-day delivery in Korea, have climbed about 26 per cent this year after the company posted its first full year of profit in 2023. It’s now seeking growth by expanding into newer arenas such as Taiwan even as Alibaba Group Holding’s AliExpress and PDD Holdings’s Temu push into its biggest market.
Chief executive officer Bom Kim told analysts during an earnings conference call in May the company will continue to invest heavily to speed up delivery across its markets. The company expects Farfetch – the online luxury company it acquired in January – to achieve close to positive adjusted earnings before interest, taxes, depreciation and amortisation on a run-rate basis by the end of 2024.
It’s also grappling with allegations it favours its own private-label goods at the expense of third-party merchants in search results. Korea’s Fair Trade Commission said in June it imposed a tentative fine of 140 billion won (S$135 million) for alleged legal violations. Coupang has said it will “vigorously appeal” the regulator’s findings. BLOOMBERG
