Coupang makes profit in Q3, first time since 2014
E-commerce giant Coupang recorded its first quarterly profit since 2014 after finding success introducing its ultrafast delivery service, Rocket Delivery, and investing heavily in technology, according to industry officials, Thursday.
“We developed a logistics network that integrates technology, delivery fulfillment (integrated logistics) and last mile delivery (the final delivery stage). Our team was able to leverage machine learning and greatly improve accuracy forecasts and inventory placement, which helped reduce fresh inventory waste by over 50 percent year-onyear in Q3 alone. It is the result of billions of dollars invested in the past seven years,” founder and CEO Kim Bum-seok said during a conference call held after the quarterly earnings announcement, Thursday.
The company’s net income stood at $90.7 million in the third quarter, a huge turnaround compared to a net loss of $324 million during the same period of last year, the New York-listed e-commerce titan said in a regulatory filing.
Coupang’s operating profit reached $77.4 million, marking the company’s first profit since 2014. Net revenue grew 10 percent year-on-year to $5.1 billion in the third quarter.
The company’s profitability was aided by its product commerce division, which includes its Rocket Delivery service. The profitability of the division increased 10 percent from a year earlier to $4.9 billion.
As of the end of the third quarter, the number of active customers who have purchased products from Coupang at least once had increased slightly from the previous quarter, estimated at 17.99 million people, a 7 percent increase from the third quarter of last year. The purchase amount per active customer was $284, similar to the second quarter of this year ($282), and a 3 percent increase from the third quarter of last year ($276).
The company attributed the improved profitability to its continued investments in tech and efforts to optimize the supply chain and business processes.
“We achieved a net profit of $91 million in all areas of our business. We have improved our profitability by improving our technology and infrastructure and optimizing our supply chain,” Coupang’s Chief Financial Officer (CFO) Geurav Anand said.
Coupang debuted on the New York stock market last year in an effort to expand its global presence. The third-quarter results were announced after the market closed on Wednesday (local time).