Coupang Posts $8.5B Q1 Revenue but Swings to Operating Loss; Wow Membership Rebounds 80%

Coupang posted about 12 trillion won in first-quarter revenue but swung to an operating loss of more than 350 billion won, weighed down by costs tied to a personal data breach and inefficiencies in its logistics network. Coupang Inc. Chairman Kim Beom-seok said Wow, the company’s paid membership service, is recovering after last year’s breach but will take time to fully normalize.

Coupang Inc. said in a filing on May 6 (Korea time) that first-quarter revenue rose 8% from a year earlier to 12.4597 trillion won, from 11.4876 trillion won. Operating loss totaled 354.5 billion won, its largest in 4 years and 3 months. Net loss was 389.7 billion won.

On a conference call, Kim said product commerce revenue growth hit a low point in January but improved each month year over year, with the pace of improvement accelerating in February and March. He said most existing customers and Wow members did not leave after the breach and continued to increase spending. As of the end of last month, he said, rejoining by former members and new sign-ups lifted Wow membership to about 80% of the level lost after the incident.

A key factor behind the loss was the purchase vouchers provided to customers affected by the data breach. In January, Coupang issued vouchers worth 50,000 won per person to 33.7 million people, for a total cost of 1.685 trillion won. Kim said the vouchers were a one-time measure and most of the impact would be limited to the first quarter, though some effects were expected to continue into early in the second quarter.

Coupang also cited logistics-network inefficiencies. The company said it had expanded facilities and adjusted supply-chain planning to match predictable demand patterns, but demand fell short of plans due to the external shock of the breach, leading to idle capacity and higher inventory costs.

Kim said efforts were continuing beyond recovery to build the business. He said Coupang is introducing automation and artificial intelligence across its logistics and delivery network to raise service levels while cutting costs, which he said should help improve customer experience and expand margins over time.

Among its overseas businesses, Kim pointed to Taiwan as a key growth driver. He said Coupang’s in-house last-mile delivery network that guarantees next-day delivery now covers most volume there and is continuing to expand. Providing the full range of Rocket Delivery services to Taiwan customers remains at an early stage, he said, but customer response has been “at an astonishing level.” He said the company will focus this year on building a top-tier customer experience in Taiwan and laying the groundwork for long-term growth.

The conference call also addressed the issue of Korea’s designation of Coupang’s controlling person. Coupang Chief Financial Officer Gaurav Anand said the company is aware of and closely reviewing the designation in South Korea and is “committed to complying with regulatory requirements” in every market where it operates.

South Korea’s Fair Trade Commission recently changed Coupang’s designated controlling person from the corporation to Kim personally. That change would increase the intensity of governance-related regulation and subject the company to rules on unfair internal transactions. Coupang has said Kim meets the conditions for an exception and plans to explain its position through an objection and an administrative lawsuit.