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Coupang Inc. faced a decline in late US trading following third-quarter earnings that fell short of analysts’ estimates, despite reporting a robust 21% revenue surge and a record number of active customers. During the period, net income remained relatively flat at $91.3 million, missing the average projection of $119 million. However, the South Korean e-commerce giant exceeded expectations in terms of net revenue, reporting $6.2 billion for the September quarter, compared to the average analyst estimate of $5.9 billion.
The stock experienced a drop of up to 9.6% in extended trading. Even before this decline, Coupang’s share price had fallen by over 50% from its debut price. The company, which went public in New York in 2021, has been contending with concerns about potential competition from Alibaba Group Holding Ltd. and PDD Holdings Inc.’s Temu expanding their presence across Asia. Furthermore, the backdrop of a global economic downturn has weighed on consumer spending as individuals become more cautious with their expenses.
Despite this setback, Coupang remains one of the few major e-commerce companies outside of China that continues to be profitable. Supported by SoftBank Group Corp., the company has reported net profits since the third quarter of 2022, driven by cost-saving measures and a membership service similar to Amazon.com Inc.’s Prime. Coupang is recognized for popularizing same-day delivery services in South Korea.
Like many of its counterparts, Coupang witnessed significant growth during the pandemic to meet the surge in online shopping. As the pandemic-driven demand subsided, the company has focused on sustaining growth through the expansion of its delivery network. It also made strategic exits from some markets while planning investments in more promising regions.
Coupang withdrew from the Japanese market but is now eyeing opportunities in Taiwan. Last year, the company introduced its “Rocket Delivery” service and recently inaugurated its second logistics center in Taiwan.
The company’s customer growth has continued to accelerate, with active customers who placed at least one order directly through its app or website during the quarter increasing by 14% to reach a record 20.4 million. Additionally, Coupang generated free cash flow of $1.9 billion over the past 12 months, a significant improvement compared to the negative $1.1 billion reported a year ago.
In Taiwan, Coupang facilitated 12,000 small businesses in exporting their products to a new market over the past year, as stated by Chief Executive Officer Bom Kim.
