Coupang, Inc. Chairman Bom Kim: “Impact of customer departures still lingers... aims to recover by mid-next year”

[Financial News] Bom Kim, chairman of Coupang, Inc. (pictured) said that while the effects of some customers leaving after the personal data breach remain, growth is continuing, driven by recovering purchases among existing customers and an influx of new members. He forecast that the deterioration in profitability caused by customer departures would be temporary, and that the growth rate and profitability of existing businesses would recover by mid-next year.
On an earnings conference call for the third quarter held on the 4th (Korea time), Kim cited “the lingering impact of a small group of customers who left after the personal data incident and have yet to return” as a disappointing factor. However, he explained that members who left after the incident and later returned had regained their previous spending levels and continued to post solid spending growth.
He emphasized that “members who did not leave are also spending at record levels and increasing their purchases as rapidly as before the incident,” adding that this was “a clear indicator demonstrating Coupang’s competitiveness in the market and the strength of its customer value proposition across its services, prices and product selection.”
He also explained that “the inflow of new members more than makes up for the gap in membership numbers, but, given the nature of new members, their spending curve starts at an early stage and takes some time to rise.”
He said the number of Coupang Wow Membership members was also growing, thanks to this customer recovery. Kim said the membership posted solid growth both year over year and quarter over quarter, reaching an all-time high. He added that net additions, boosted by returning existing members and new-member inflows, also exceeded past levels.
Kim also assessed that growth had continued in the third-quarter results. He said, “Strong growth momentum continued across the business in the third quarter,” adding that “consolidated revenue grew 11% on a constant-currency basis, exceeding the guidance we had provided.”
He went on to say that “growth was even stronger than in the second quarter, despite the unfavorable timing of this year’s Chuseok holiday.” He added that the Product Commerce segment grew about 9% after adjusting for the effects of the difference in holiday timing, accelerating from the previous quarter.
He also expressed confidence in a recovery in profitability. Kim cited supply chain disruptions, fixed costs associated with facilities, and increased marketing investment to bring customers back as reasons for the deterioration in the Product Commerce segment’s profitability. He said, “I don’t consider any of these factors structural issues,” adding, “My conviction remains unchanged that Product Commerce margins will recover to near pre-incident levels next year.”
He expected supply chain imbalances to normalize as volumes recover and facility utilization to improve gradually. He explained that the rate of increase in marketing costs to bring customers back was also slowing. He emphasized that the company was targeting a recovery in the Product Commerce segment’s growth rate and profitability by mid-next year.
Coupang, Inc. recorded an operating loss of $450 million (642.3 billion won) in the third quarter of this year. This marked a shift to a loss from an operating profit of $162 million (224.5 billion won) in the same period last year.
As a result, Coupang, Inc. has posted operating losses for three consecutive quarters this year. After recording operating losses of 354.5 billion won in the first quarter and 835 billion won in the second, it also posted a substantial loss in the third quarter. The cumulative operating loss for the first through third quarters of this year thus reached 1.8318 trillion won, nearly equal to the total operating profit it earned over the past three years.

[email protected] Jang Yu-ha Reporter