Bom Kim, chairman of the Coupang Inc. board. Yonhap News
Coupang Inc. (CPNG) Chairman Bom Kim said the impact of the recent data breach has been limited, with most existing customers and WOW members remaining on the platform.
“The majority of WOW membership customers did not leave after the data incident, and most have returned to pre-incident spending levels,” Kim said during Coupang Inc.’s first-quarter earnings conference call. “About 80% of the WOW membership decline that occurred after the incident has already been recovered, and we continue to see returning customers and new sign-ups.”
Kim emphasized that the deterioration in profitability stemmed from temporary factors. “Two factors are affecting profitability this year,” he said. “The first is the issuance of customer compensation vouchers related to the personal data breach, which was largely reflected in the first quarter, with only a small portion to be reflected in early second quarter.” He added, “The second factor is temporary inefficiencies in our logistics network.”
Kim expressed confidence in a recovery in profitability going forward. “We expect margin expansion to resume on an annual basis next year,” he said. “We will upgrade our logistics network to raise service levels while improving our cost structure.”
He added, “Our next-day delivery network already covers most of our volume, and we are building a long-term growth foundation on that basis.” Kim also stressed, “We will expand our Rocket Delivery product lineup to enhance customer experience, while improving service levels through the introduction of automation and artificial intelligence (AI) in our logistics and delivery networks.”
According to the first-quarter consolidated earnings report Coupang Inc. filed with the U.S. Securities and Exchange Commission (SEC) on May 6 (local time), first-quarter revenue rose 8% year-on-year to $8.504 billion (12.46 trillion won). However, it fell short of the previous quarter’s revenue of $8.835 billion.
The first-quarter operating loss came in at $242 million (354.5 billion won), swinging to a loss from an operating profit of $154 million (233.7 billion won) a year earlier. Net loss also turned negative at $266 million (389.7 billion won). This marks the largest quarterly loss in four years and three months, since the fourth quarter of 2021.