**Coupang Achieves Record Quarterly Revenue of 10.6 Trillion Won, Up 32% from Previous Year**
Coupang’s operating profit reached 148.1 billion won, marking a successful turnaround from losses in the previous quarter.
On November 6th (Korean time), Coupang Inc reported to the U.S. Securities and Exchange Commission (SEC) that its Q3 revenue amounted to 10.69 trillion won (7.866 billion U.S. dollars at an average quarterly exchange rate of 1359.02), a 32% increase from the same quarter last year (8.1028 trillion won or 6.1835 billion U.S. dollars), setting a new quarterly sales record.
Coupang’s customer base grew by 11% from last year, reaching 22.5 million. Excluding Farfetch’s revenue (596.6 billion won or 439 million U.S. dollars), Coupang’s revenue grew by 25% to 10.093 trillion won (7.427 billion U.S. dollars) compared to the previous year.
Much attention on Wall Street was focused on the reduction of losses at Farfetch, a company previously making significant yearly losses nearing 1 trillion won until its acquisition by Coupang at the beginning of this year.
In Q3, revenue from developing offerings such as Taiwan, Coupang Eats, Farfetch, and Coupang Play, amounted to 1.325 trillion won (975 million U.S. dollars), a 356% increase from the previous year. Adjusted EBITDA losses in these growth businesses were 127 million U.S. dollars (172.5 billion won), down about 21% in dollar terms from 160 million U.S. dollars (210.7 billion won) in the same period last year.
The primary driver for this improvement was the reduction of losses at Farfetch. Farfetch’s adjusted EBITDA loss drastically decreased from 42.4 billion won (310 million U.S. dollars) in Q2 to just 2.7 billion won (2 million U.S. dollars) this quarter.
Coupang CFO, Gaurav Anand, noted, “We have achieved near-break-even profitability at Farfetch earlier than planned.” Initially, Coupang aimed to normalize the company to a near-break-even level by year-end. Farfetch’s net loss also decreased by about 61%, from 113 million U.S. dollars in Q1 to 44 million in the current quarter, indicating an imminent possibility of turning to profits.
Farfetch, a global luxury brand retailer operating in 149 countries with products from 1,400 luxury brands, was fully acquired by Coupang earlier this year. Coupang Inc stated, “We have decided to acquire Farfetch Holdings, a leading online luxury company,” and emphasized combining Coupang’s superior operational systems and logistics innovations with Farfetch’s leading role in the luxury ecosystem to offer the best experience to global customers, boutiques, and brands. The acquisition price was approximately 500 million U.S. dollars (650 billion won).
Farfetch had once boasted around 4 million active luxury shoppers, but with prolonged losses, its market cap on the U.S. stock market dropped from 23 billion U.S. dollars (about 30 trillion won) in 2021 to 250 million U.S. dollars (about 320 billion won), risking insolvency. Farfetch experienced operating losses of 1.168 trillion won (847 million U.S. dollars) in 2022 and 560 billion won (464 million dollars) in the first half of 2023, opting for delisting and acquisition by Coupang last year.
However, skepticism was widespread about Coupang’s ability to normalize Farfetch, when the acquisition was first announced, with industry voices questioning the feasibility. “There are evaluations that Coupang’s chance of succeeding in the luxury online market is increasing, given that Founder and Chairman Bom Kim managed to bring the company close to break-even within a year of acquisition,” noted an industry insider.
Although Farfetch’s revenue decreased from 460 million U.S. dollars in Q2 to 439 million U.S. dollars (596.6 billion won) this quarter, its losses were significantly reduced thanks to structural adjustments and business efficiency improvements post-acquisition.
Meanwhile, Coupang’s Q3 operating profit surged by 29% to 148.1 billion won (190 million U.S. dollars) from 114.6 billion won (87.5 million U.S. dollars) the previous year. However, the operating margin dropped slightly to 1.38% from 1.41% last year. Furthermore, net income for the period fell by 27% to 86.9 billion won (64 million U.S. dollars) from 119.6 billion won (91.3 million U.S. dollars) last year.
Coupang’s product commerce segment—encompassing Rocket Delivery, Rocket Fresh, Rocket Growth, and Marketplace—accounted for 22.5 million active customers, an 11% increase from the same period last year (20.2 million), expanding by 800,000 from Q2 of this year (21.7 million), with per-customer revenue increasing by 8% year-on-year to 432,160 won (318 U.S. dollars).