Coupang reports first loss in two years

Coupang, South Korea's largest online retailer, reported a net loss of $77 million in the second quarter of 2023, significantly worse than the average estimate of a $11.7 million loss. The loss was primarily driven by the acquisition of the loss-making company Farfetch and a regulatory fine imposed by Korean authorities. Excluding these factors, Coupang's net income for the second quarter would have been approximately $124 million, according to the company. Coupang's stock price fell by over 5% in late U.S. trading. Despite these losses, the company achieved robust revenue growth of 25%, reaching $7.3 billion. Coupang's shares, which have popularized next-day delivery in Korea, have already risen by about 26% this year, following the company’s first annual profit recorded in 2023. CEO Bom Kim emphasized in a May analyst conference call that the company would continue to heavily invest in accelerating delivery times in its markets. Coupang expects Farfetch—the luxury online retailer acquired in January—to come close to positive adjusted EBITDA on an annual basis by the end of 2024. At the same time, the company faces allegations of favoring its own branded products over those of third-party sellers in its search results. In June, the Korean Fair Trade Commission imposed a provisional fine of 140 billion won ($102 million) for alleged legal violations. Coupang has announced its intention to "vigorously contest" the regulator’s decision.