South Korea’s leading e-commerce company Coupang last year posted its best-ever revenue, but the top-line feat was weighed down by concerns about its sustainability as it came at the expense of ballooning red figures in the bottom line.
Coupang disclosed its audit report on Monday that it raked in 4.42 trillion won ($4.1 billion) in revenue last year, up 65 percent from the previous year. Operating loss widened to 1.09 trillion won in 2018 from 638.8 billion won in 2017 due to increased spending on its fast delivery services called Rocket Delivery, its signature service that promises delivery within 24 hours, and Rocket Wow service that delivers products ordered before midnight by 7 a.m. of the next day.
Due to the mounting operating loss from 547 billion won in 2015, 560 billion won in 2016 and 638.8 billion won in 2017 on expansion of logistics infrastructure and increase in inventories, its equity capital was completely eroded in 2017. However, the company has kept diversifying its businesses and making bold investments. It said it has built up enough capital to keep scaling up businesses with long-term perspective.
Last November, the retailer attracted $2 billion in funding from its major shareholder SoftBank Group in Japan through SoftBank Vision Fund launched to help developing innovative and disruptive technologies. It was SoftBank’s second investment in Coupang following the $1billion in 2015.
Coupang expanded its delivery centers to 24 in 12 regions across the country and added more workers to its payroll to boost its fast delivery services. It now employs 24,000 and its labor cost amounted to 986.6 billion won last year. It launched fresh food delivery service Rocket Fresh last October and expanded it nationwide after three months and increased the number of products subject to Rocket Delivery to 5 million.
By Kang In-seon and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]