One of South Korea’s biggest e-commerce firms, Coupang, says its operating loss shrank by a third in 2019. It is helped by a 64% climb in revenue as it expanded its customer base and online demand for home appliances and groceries surged, reports Reuters.
Due to the COVID-19 outbreak, Coupang sees its sales jump even more in 2020. Operating loss of the South Korean company in 2019 came in at 721 billion won ($593 million). In 2018, the loss was still 1.1 trillion won. Total revenue grew to 7.2 trillion won. It is the second year in a row that the total revenue grows with more than 60%.
Coupang is backed by the Japanese SoftBank Group. For this company, these stronger results are a relatively bright note. SoftBank Group announced earlier this week it expects its $100 billion Vision Fund to book a loss of 1.8 trillion yen due to the worsening performance of its tech bets.
The COVID-19 outbreak results in an e-commerce growth-spike. Many people turn to online shopping these days and sales in brick-and-mortar stores soar. In South-Korea, online shopping jumped 25% to 11.96 trillion won ($9.8 billion) in February. This accounts for 28% of all retail sales, government statistics indicate.
Coupang says that, since mid-February, the number of deliveries grew to 3 million a day. Late last year, the normal was 2.2 million. Part of Coupang’s strategy is delivery within 24 hours. This is what they call ‘Rocket Delivery’. To grow market share, they have invested quite a lot to realise this. It is still a question whether these investments will pay of in the current market. As noted, the South Korean company is far from being profitable.