South Korean e-commerce giant Coupang reported record-breaking quarterly revenue in the third quarter this year, returning to profitability after an operating loss in the previous quarter. Despite initial concerns of customer attrition following an August price hike for its Wow Membership from 4,990 won ($3.58) to 7,890 won ($5.66), the number of active customers using services like Rocket Delivery grew by 11%, alleviating these worries.
Rocket Delivery, Coupang’s signature same-day and next-day delivery service, offers swift delivery on a wide range of products, making it a key attraction for subscribers. The Wow Membership, a paid subscription, provides access to Rocket Delivery and other exclusive benefits, keeping customers engaged with the platform’s extensive offerings.
Coupang, listed on the U.S. stock exchange, announced on Nov. 6 that its third-quarter revenue reached $7.87 billion, marking a 32% increase from the same period last year ($6.18 billion) and setting a new record. When converted to U.S. dollars, this represents a 27% year-over-year increase in revenue.
Excluding Farfetch revenue ($439 million), Coupang’s revenue was around $7.43 billion, up 25% from the same period last year. Operating profit stood at $109 million, a 29% increase from $87.5 million a year ago, or a 25% rise in dollar terms. Farfetch is a global luxury fashion platform, which Coupang acquired in January this year.
Coupang surpassed 10 trillion won ($7.1 billion) in quarterly sales for the first time in the second quarter of this year. However, operating performance dipped into negative territory due to a $116.8 million fine from the Korea Fair Trade Commission. Although Coupang achieved its first operating profit in the third quarter of 2022 ($74.4 million) and maintained a streak of profitable quarters for seven consecutive quarters, the company reported a loss in the second quarter of this year before returning to profit in the third quarter.
The company’s core business units—Rocket Delivery, Rocket Fresh, Rocket Growth, and Marketplace—reported 22.5 million active customers, up 11% from 20.2 million a year earlier and 800,000 more than the second quarter′s 21.7 million.
Industry experts initially expected a ‘Coupang exodus’ after the Wow Membership price hike, predicting a drop in paid members. However, following recent upheaval involving competitors Tmon and Wemakeprice—who have been struggling with financial instability and operational challenges—Coupang’s user numbers actually rose.
Coupang CFO Gaurav Anand commented, “New services like Rocket Growth (FLC) and our luxury line, ‘R.lux,’ show how expanding our Rocket Delivery options opens up new growth opportunities. We’re also close to hitting breakeven at Farfetch ahead of plan. Our focus continues to be on delighting our customers and maintaining top-notch operations.”
