Coupang Q3 net falls 27% on facility investments

A Coupang logistics center in Daegu, North Gyeongsang Province, in this undated photo. Korea Times photo by Jung Min-seung Korean e-commerce giant Coupang, Inc. said Wednesday its third-quarter net profit fell 27 percent from a year earlier due to increased facility investments.

Net profit for the three months to September fell to 86.9 billion won ($64 million) from 119.6 billion won during the same period of last year, the company said in a statement.



"Sharply increased investments in logistics infrastructure worth over 520 billion won weighed on the quarterly results," the statement said. But operating profit rose 29 percent to 148.1 billion won in the third quarter from 114.

6 billion won a year ago. Sales were up 32 percent to 10.69 trillion won from 8.

1 trillion won during the same period, marking the highest quarterly figure. New business categories, like Fulfillment and Logistics by Coupang (FLC) and R.Lux, a new luxury offering, helped prop up the operating profit, it said.

In the FLC service, Coupang manages storage, inventories and deliveries for small partner companies. "We also achieved an important milestone in Developing Offerings this quarter, reaching near break-even profitability in Farfetch, earlier than planned," Coupang Chief Financial Officer Gaurav Anand said in the statement. Sales of Developing Offerings, Coupang's segment of new growth companies, which also includes the food delivery service Coupang Eats and the streaming platform Coupang Play, more than quadrupled to 1.

32 trillion won in the third quarter from 285 billion won a year ago. In January, Coupang acquired British online luxury fashion retailer Farfetch Holdings in a deal that awarded the New York-listed e-commerce firm the leading position in the $400 billion global personal luxury goods market. From January to September, Coupang shifted to a net loss of 88.

7 billion won from a net profit of 426.4 billion won in the year-ago period amid growing challenges from Chinese rivals. Operating profit plunged 62 percent to 167 billion won in the first nine months from 444.

8 billion won a year earlier. Coupang faces tough challenges from Chinese e-commerce retail platforms — PDD Holdings' Temu and Alibaba Group's AliExpress — which are wooing customers away from Coupang through aggressive marketing. It plans to invest 3 trillion won for the next three years to expand its renowned Rocket Delivery service nationwide and cement its leading status in the competitive local delivery market.

(Yonhap).