Seoul: South Korean e-commerce giant Coupang Inc. said it swung to a profit in the second quarter, largely due to a base effect stemming from a one-off expense last year.
According to Yonhap News Agency, in the three months ended June 30, Coupang reported a net profit of 43.5 billion won (US$31 million), shifting from a net loss of 143.8 billion won in the same period last year, the company said in a press release. "The return to profitability is attributable to a one-off factor. In the second quarter of 2024, a fine of 163 billion won was reflected in the then bottom line," the release said.
The Fair Trade Commission (FTC) imposed the fine after determining that Coupang had manipulated its search algorithms and posted fabricated product reviews to boost sales of its private-label goods. Coupang gave preferential exposure to its own products over those of third-party sellers through deceptive algorithms from February 2019 to June 2024, hindering fair competition and misleading consumers, according to the FTC.
Operating profit also swung to an operating profit of 209.3 billion won in the second quarter from an operating loss of 34.2 billion won a year ago. Sales rose 19 percent to 11.97 trillion won from 10.03 trillion won during the same period.
The company said robust sales in its new growth segments -- including British luxury fashion platform Farfetch Holdings, delivery services in Taiwan and food delivery platform Coupang Eats -- contributed to its highest-ever quarterly revenue. Sales in the new growth businesses surged 33 percent on-year to 1.67 trillion won in the quarter. Coupang acquired British retailer Farfetch in January 2024, a move that positioned the New York-listed company as a key player in the $400 billion global personal luxury goods market.