Seoul: South Korean e-commerce giant Coupang, Inc. announced on Wednesday that its sales surpassed 40 trillion won (US$27.9 billion) for the first time last year, driven by strong performance in its "new growth" business segment.
According to Yonhap News Agency, sales increased by 29 percent to reach a record 41.29 trillion won in 2024, up from 31.82 trillion won the previous year. The company attributed the record-breaking annual sales to increased revenues from its new growth ventures, which include the online fashion retailer Farfetch Holdings, delivery services in Taiwan, and the food delivery service Coupang Eats.
The acquisition of British retailer Farfetch in January 2024 significantly contributed to Coupang's success, enabling the New York-listed company to establish a strong presence in the $400 billion global market for personal luxury goods. This, coupled with robust demand for Coupang's well-known Rocket Delivery service in Taiwan, drove the impressive sales figures.
Coupang's Chief Executive and founder, Kim Bom, remarked on the earnings conference call that the successful strategies developed in South Korea could be effectively implemented in other markets. The company anticipates a 20 percent growth in annual sales this year, fueled by its new growth segment.
Despite the surge in sales, Coupang's net income experienced a substantial decline, dropping 95 percent year-on-year to 94 billion won from 1.36 trillion won in 2023. Company officials cited a "base effect" and substantial investments in new ventures as key factors impacting earnings.
"Increased investments in new businesses in global markets, such as Taiwan, and automation of local logistics facilities weighed on the annual earnings results," a company spokesperson stated. Consequently, operating profit fell by 2.4 percent year-on-year to 602.3 billion won in 2024.
In the fourth quarter, Coupang posted a net profit of 182.7 billion won, a significant decrease from 1.36 trillion won in the same period of 2023. The company noted that a non-cash tax benefit of $895 million had been reflected in the fourth quarter of 2023, which was absent in the 2024 results.
However, operating profit more than doubled to 435.3 billion won from 171.5 billion won in the referenced period. The company also reported receiving an insurance payout of 244 billion won for a fire at its logistics center in Deokpyeong in June 2021, which was included in the quarterly earnings.
Sales for the fourth quarter rose 28 percent to a record 11.1 trillion won, compared to 8.66 trillion won a year earlier.