▲ Coupang Headquarters and Coupang Inc. Chairman Bom Kim
Coupang Inc. Chairman Bom Kim said on August 4 (local time) that "the fundamental flow of growth remains unchanged."
During the second-quarter earnings conference call held on this day, Chairman Kim stated, "Most of the customer spending affected by the personal data leak incident has already recovered, and we have now returned to the same growth trajectory as before the incident."
Coupang Inc. publicly disclosed in its filings for the second quarter that it recorded revenue of 13.3007 trillion won (8.856 billion dollars) and an operating loss of 835 billion won (556 million dollars).
While revenue marked the largest scale since its listing on the New York Stock Exchange in 2021, the company posted its largest-ever operating deficit in terms of operating profit due to the reflection of penalties resulting from the personal data leak incident.
In particular, this operating loss is nearly 200 million dollars larger than the market consensus of 361.4 million dollars compiled by Bloomberg.
Chairman Kim explained, "The number of Wow membership subscribers has surpassed the level recorded before the personal data incident occurred. Customers who left during the incident period and returned have recovered their previous spending levels and are once again showing a high growth trend."
He also emphasized, "The record-high number of members will be reflected in revenue with a time lag."
Even though some customers have yet to return, customer spending increased by 16% compared to the same period last year, coming close to the product commerce growth rate (17%) recorded in the second quarter of last year before the incident, according to the company.
Regarding the operating loss, Chairman Kim argued, "We plan facility capacity and fixed costs according to expected demand curves. As revenue temporarily fell lower than the initial plan amid a long preparation period, the proportion of costs relative to revenue increased. Precise management of facility utilization rates and economies of scale, which are core to Coupang's growth, became the reason why sudden shocks appeared more prominently in the indicators."
He added, "Although we could not fully enjoy the effects of economies of scale this year, next year we will achieve the recovery of logistics efficiency and the normalization of marketing expenses together. While we may see quarterly fluctuations, we expect to recover our previous growth rate and margin structure once the affected period passes."
Although Coupang posted its largest deficit since going public, it focused on growth rather than profitability in the second quarter, displaying confidence in customer recovery and the expansion of new businesses.
Mentioning the early-morning delivery service launched in Taiwan, Chairman Kim said, "While it took four years to establish early-morning delivery in Korea, it was possible in just one year in Taiwan."
He explained that the speed of service establishment accelerated significantly by directly applying the logistics systems and operational know-how accumulated in Korea.
Evaluating Coupang Eats as a success story, he stated, "Coupang's core competitiveness—price, product selection, and service—worked in food delivery as well," and announced plans to apply the same growth formula to Rocket Now in Japan.
He also emphasized his confidence in Coupang's business structure, saying, "(Coupang) applies the network and speed trusted by customers to new cases, providing customers with more opportunities to save time and money."
He also mentioned plans for utilizing AI.
Chairman Kim said, "More important than AI itself is the logistics network, operational data, and customer base we have built over the past 15 years. Applying AI to customer experiences is expected to bring effects such as product search and personalized services, as well as enhanced productivity and cost reduction."
Finally, he emphasized, "Our goal is to create an experience where customers feel, 'How did I ever live without Coupang?' I believe we will have opportunities to build services that meet that standard across every product, service, and expanding market we add."
(Photo: Excerpted from Coupang's U.S. stock market listing application materials, Yonhap News)
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