Korean e-commerce major Coupang will raise 294 billion won ($252 million) from its parent incorporated in Delaware, U.S, to add distribution centers and strengthen new businesses including Coupang Eats and Rocket Fresh as it is expected to deliver highest quarterly sales for the third quarter ended September in its earnings report to be released next week.

Coupang announced Monday that its U.S. parent Coupang Inc. will fund 294 billion won to the company by purchasing new equity offering. Coupang Inc. which owns a full stake in Coupang receives external investments and invests it back to Coupang.

It will mark the e-commerce giant’s third rights offering for this year, following an offering of 391 billion won in April and 228.7 billion won in July. Coupang said it has disclosed the capital increases after it was categorized as a large business group in late April under the country’s fair trade law.

Coupang has been recapitalizing since 2019 after its U.S. parent received $2 billion in funding from SoftBank in November 2018 and raised 5 trillion won after listing on the New York Stock Exchange in March this year.

Market watchers expect Coupang would report the highest quarterly revenue in the third quarter surpassing the previous record of 5 trillion won posted in the previous quarter, thanks to the increased sales from Chuseok holiday in September.

Some even expect the e-commerce platform will be able to achieve 20 trillion won in annual revenue at the end of the year, up from 13 trillion won last year. Coupang could become the biggest retail player in the country on par with E-Mart if it generates 20 trillion won sales, outperforming other traditional retailers Lotte Shopping with annual sales of 16 trillion won and GS Retail with 10 trillion won, according to an industry official.

Coupang will use the new funds in expanding its food delivery service Coupang Eats. It has begun offering one-at-a-time express delivery service in early morning across Seoul to challenge the No.1 delivery player Baedal Minjok. It has also provided discount coupons for repeat customers. As a result, the number of monthly active users (MAU) of Coupang Eats quadrupled to 5.2 million in July from the same month last year.

Industry watchers worry, however, that the company seems to have a long way to narrow its ever-widening loss. It has decided to spend 1 trillion won to add new distribution centers across the country and increase investment to stay competitive in the hotly contested e-commerce and delivery market.

As of 1:19 p.m. on Tuesday in Korea, Coupang shares rose 0.83 percent to $29.24 on the NYSE.

By Hong Sung-yong and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]