Coupang Inc., a major player in South Korea’s e-commerce market, reported a net loss of $105 million in the second quarter, marking its first quarterly loss in two years. This downturn is attributed to a $121 million fine from the Korea Fair Trade Commission (KFTC) related to alleged search algorithm manipulation and restructuring costs associated with its acquisition of Farfetch, a luxury goods retailer based in London.
The company posted an operating loss of 34.2 billion won ($25 million) for the second quarter, ending a seven-quarter streak of profits. Coupang had achieved its first quarterly profit of 103.7 billion won in the third quarter of 2022. Despite these setbacks, Coupang’s second-quarter revenue surged 30% year-on-year to 10.04 trillion won ($7.3 billion), surpassing the 10 trillion won mark for the first time.
Coupang stated that, excluding the expenses related to the KFTC fine and Farfetch restructuring, its net income would have been $124 million for the quarter. The KFTC accused Coupang of manipulating its search algorithms to favor its private labels and direct sales, which led to the substantial penalty.
Coupang continues to grow its customer base, with 21.7 million active users for its core services, Rocket Delivery and Rocket Fresh, a 12% increase from the previous year. The average sales per customer rose 5% year-on-year to $309, reflecting continued demand despite financial challenges.
