Coupang Losses Continue With Spending on Capacity, Services
Coupang Losses Continued With Spending on New Services
(Bloomberg) -- Coupang Inc., South Korea’s leading e-commerce company, reported a wider year-on-year net loss in the third quarter after investment in logistics to support faster deliveries and in streaming video services.
Shares in Coupang dropped 6.7% in premarket trading in New York.
Losses rose to $315.1 million for the period, compared with $216.2 million a year earlier, according to a statement Friday. Revenue climbed 48% to $4.6 billion, while the number of active clients increased 20% to 16.8 million. The net loss hit $518.6 million in the June quarter, after the company suffered damages from a fire at one of its distribution centers.
“Quarter-to-quarter, there’s always some noise that might obscure the improvements that we’re seeing in the underlying profit drivers,” Bom Kim, Chief Executive Officer, said during an earnings call. “We are able to take the cash flow from mature investments, mature offerings and reinvest in areas like fresh and eats.”
Coupang, led by Harvard Business School dropout Kim, went public in March in a blockbuster initial public offering that saw its shares surge more than 40% to a market value of more than $85 billion. Yet shares have since tumbled below the IPO price as losses mount and the company vows to continue spending.
With success at home, Coupang is entering overseas markets such as Japan and Taiwan. The overseas expansion is at an earlier life stage cycle, Bom said, adding he’s seeing similar chances that they saw at the earlier part of the business in South Korea.
Backed by Japan’s SoftBank Group Corp., Coupang has been aggressively expanding its e-commerce business at home and following a playbook from Amazon.com Inc. by entering grocery delivery and streaming video. SoftBank sold about $1.69 billion worth of shares in Coupang in September as part of stake sales in listed portfolio companies so that it could inject cash in other technology startups.
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