Korean retail giant turns profit for 2 straight quarters
South Korean online retailer Coupang announced on March 1 that it had chalked up record sales last year at $20.58 billion, up 26 percent from a year before.
The 2022 net loss of Coupang, which is listed on the New York Stock Exchange, amounted to $92 million compared to the $1.54 billion loss in 2021.
During the fourth quarter of last year, the Seoul-based corporation logged $5.3 billion in turnover, up 21 percent year-on-year, for a net income of $102 million.
Turning profit last third quarter after years of accumulating losses, the company topped the $100 million mark in quarterly profit for the first time.
“There are a lot of reasons to be optimistic about the future. The overwhelming majority of the retail market is still offline with high prices and limited selection,” Coupang founding CEO Bom Kim said in a statement.
“Our investments in new moments of ‘wow’ in nascent initiatives like food delivery, video streaming, fintech, and international have the potential to unlock outsized value for customers and shareholders in promising new areas of growth.”
Coupang CFO Gaurav Anand expected that the company would rack up margin expansion this year by penetrating the vast retail market.
On top of the South Korean market, Coupang has tapped into overseas markets, including Japan and Taiwan.
Observers point out that Coupang would be able to remain profitable.
“When Coupang suffered from billions of dollars of losses over the past years, many worried about its sustainability. But now the going concerns appear to be gone,” Prof. Seo Yong-gu at Sookmyung Women’s University said.
“Coupang’s strategy of gaining weight first to make money later has worked. As it becomes a business bellwether in the domestic market, it will continue to make money. In the Korean retail market, the winner takes all.”
The share price of Coupang went down 5.42 percent on the New York Stock Exchange Wednesday.