In 2023, Coupang, a South Korean e-commerce giant, achieved a significant milestone by recording its first-ever annual profit. The company’s sales grew by 20%, surpassing $24 billion, and it also reported an impressive operating profit of $473 million. This achievement was primarily attributed to the company’s customer growth and increased spending on its platform.
As per the 4th quarter earnings report of 2023 submitted to the Securities and Exchange Commission (SEC) on Feb. 28 (Korean time), Coupang’s sales for the 4th quarter of last year amounted to $6.5 billion, reflecting a 20% increase from the same period in the previous year.
The company’s operating income for the 4th quarter was $130 million, indicating a 51% growth from the same period in 2022.
Sales in Coupang’s Developing Offerings sector reached $273 million, which is nearly double what was recorded in the same period of the previous year, 2022. This sector includes Coupang Eats, Coupang Play, Coupang Pay, and businesses operated in Taiwan.
For the entire year of 2023, Coupang’s annual sales were $24.3 billion, which is a 20% increase from the previous year. Notably, the company achieved its first operating profit with a total of $473 million.
Previously, Coupang did not have very promising business profits. Coupang faced an operating loss of $1.5 billion in 2021, but this loss was reduced significantly by 92% to $112 million in the following year.
After recording its first quarterly operating profit in the third quarter of 2022 ($ 778.1 million), the company has maintained a profit every quarter, ultimately succeeding in turning an annual profit for the first time last year.
In the last quarter of 2023, Coupang reported a net income of $137 million and an adjusted net income of $465 million for the year, which is similar to the operating income scale for each period.
However, Coupang mentioned in the report that the net income reported for accounting purposes was $1 billion and $1.36 billion for the 4th quarter of 2023 and the entire previous year, respectively. But $895 million was reflected due to one-time adjustments, such as the recognition of deferred tax asset assets. Since this is not an actual cash inflow, the net income for the last quarter and the year was $137 million and $465 million, respectively.
Last year, Coupang experienced an increase in both the number of customers and the amount of money spent on the platform.
The number of Coupang customers in 2023 grew by 16% to 21 million from the previous year’s 18.11 million. The growth rate was steeper each quarter following increases of 5%, 10%, and 14%, respectively, in the 1st, 2nd, and 3rd quarters.
Revenue per active customer also increased by 3% to USD 312 (KRW 416,600) from the same period in 2022. An active customer is defined as a consumer who makes at least one purchase per quarter. Coupang’s current total number of active customers increased by approximately 600,000 from the previous quarter (20.42 million).
