SEOUL (Reuters) – Coupang Corp, one of South Korea’s biggest e-commerce firms, said on Tuesday its operating loss shrank by a third last year, helped by a 64% climb in revenue as it expanded its customer base and online demand for home appliances and groceries surged.
The SoftBank-backed company has seen sales jump even more this year as demand spikes amid the coronavirus pandemic.
Its operating loss for 2019 came in at 721 billion won ($593 million), compared with a loss of 1.1 trillion won in the previous year, it said in a regulatory filing.
Revenue climbed to 7.2 trillion won, the second year in a row it has seen a jump of more than 60%.
The stronger performance is a relatively bright note among SoftBank Group Corp (9984.T) investments. The Japanese investment giant said 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.
Around the world, the coronavirus pandemic is only adding momentum to the growth of e-commerce.
Online shopping in South Korea jumped 25% to 11.96 trillion won ($9.8 billion) in February from a year earlier, accounting for 28% of all retail sales, according to the government’s statistics office.
In early March, Coupang said that since mid-February deliveries had climbed to 3 million daily compared with around 2.2 million per day late last year.
Some analysts were, however, cautious about the costs involved in gaining market share.
“Coupang has been spending quite a lot on marketing and advertisements but they need to be more strategic when it comes to such additional costs as they are still not generating profit,” said YS Jung, an analyst at NH Investment & Securities.
Founded by 41-year-old Harvard graduate Bom Kim in 2010, Coupang made a splash with its ‘Rocket Delivery’ service that promised delivery within 24 hours and dealt a sharp blow to the country’s family-owned retail conglomerates including Shinsegae and Lotte.
It secured a combined $3 billion in investment from SoftBank (9434.T) and its Vision Fund in 2015 and in 2018.
Reporting by Heekyong Yang; Additional reporting by Hyunjoo Jin; Editing by Edwina Gibbs