South Korean eCommerce platform Coupang reported its first-ever profit Wednesday (Nov. 9), a landmark the company attributed to its investments in technology.
“We achieved another milestone this quarter, delivering record net income of $91 million across the entire business,” said Coupang Chief Financial Officer Gaurav Anand in a news release. “Much of the recent improvement has been the result of investments in technology, infrastructure, supply chain optimization, and process innovation.”
The company said its revenues rose to $5.1 billion, fueled by an increase in both active customers and revenue per active customer.
PYMNTS reported in August that Coupang was on the cusp of turning a profit following a rocky, 17-month path for the company.
Last year was an important one for Coupang as it went public with a historic, $4.6 billion initial public offering (IPO) and reported revenue growth that was twice as fast as the eCommerce sector in South Korea.
By August of this year, the company’s value was down by 60%, although officials were cautiously optimistic about reaching profitability.
“[I]f Coupang’s plan works, the rise, fall and rebound of the fast-growing online retail and delivery platform could be one for the history books,” PYMNTS wrote at the time.
On a conference call Wednesday, Coupang Founder and CEO Bom Kim delved a bit deeper into the company’s technological investments, particularly in terms of automation.
“For instance, typically inventory loss grows as you increase the breadth of selection in fresh, especially across multiple regions,” he said. “We set out to break this trade-off and provide customers with the widest assortment of fresh at the lowest cost.”
Kim said the company found ways to use machine learning and other tools to better forecast changes in customer behavior and optimize inventory orders and placement, helping drive a 50% year-over-year reduction in fresh inventory losses in the third quarter.
“There are numerous such efforts across the company to improve efficiency, many of which have been ongoing for years,” said Kim. “The rate of improvement won’t be consistent or as dramatic each quarter, but we’re excited about the potential ahead.”
This is happening against the backdrop of South Korea’s emergence as an eCommerce powerhouse, PYMNTS noted recently, as the country has become the world’s 10th-largest luxury goods market. The size of this market grew by 29.6% year over year to hit $5.8 billion in 2022, and experts predict this expansion will continue, reaching $7 billion by 2024.
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