Bom Kim, Chairman of Coupang Inc., expressed confidence in the rapid growth of the company’s Taiwan operations and its recovery from the impact of last year’s data breach. Speaking during the company’s second-quarter earnings conference call on the 4th (local time), Kim said that business models proven in South Korea are establishing themselves even faster in overseas markets. He projected that starting next year, the growth rate and profitability of the product commerce business will normalize to pre-incident levels.<\/p>\n
Kim identified the greatest strength of the Taiwan operations as the technology and operational innovations accumulated in South Korea over more than a decade. “We are transplanting the shopping experience built in South Korea to Taiwan, our first service region, and we are building it at a much faster pace than the first time,” he said. “That’s because the Taiwan business isn’t starting from scratch\u2014it’s directly inheriting South Korea’s know-how.”<\/p>\n
A prime example is dawn delivery. In South Korea, it took four years after establishing the logistics network to introduce dawn delivery, but in Taiwan, the service launched in just one year. Kim emphasized that by directly leveraging accumulated expertise in system design, operational methods, and delivery processes, the pace of service expansion has accelerated significantly.<\/p>\n
He identified expanding product assortment as the core challenge for the Taiwan business. “Currently, the number of products in Taiwan is still only a fraction compared to Rocket Delivery in South Korea,” he said, while projecting that “as products increase one by one, customers will save more time and money, and their share of spending on Coupang will grow accordingly.” He also noted that “the same phenomenon we’ve seen in South Korea for 15 years\u2014where existing customers steadily increase their spending\u2014is already appearing in Taiwan,” adding that “the spending growth curve of early customers is very similar to South Korean customer cohorts at the same stage.”<\/p>\n
However, Kim made clear that quarterly growth may fluctuate. “In the process of adjusting certain categories to create an appropriate cost structure, it may temporarily appear as a step backward,” he said. “The current profit and loss structure is also merely a result of the early investment phase. As supply chain efficiency improves and volumes increase, economies of scale will kick in, and we will achieve a profit structure similar to South Korea’s.”<\/p>\n
Growth Strategy Validated by Coupang Eats<\/p>\n
Kim emphasized that the same growth model is being applied to the on-demand delivery business. “We only deploy initial investment in businesses that can generate meaningful cash flow over the long term, and we only expand investment when customer response has been validated,” he said. “Ultimately, the goal is to create a structure where existing businesses can fund investments in new ones.”<\/p>\n
He particularly assessed Coupang Eats as a case that successfully proved this growth formula. “We entered the food delivery market\u2014which many people thought was a finished competition\u2014with relatively small investment, but customers responded positively to pricing, product selection, and service competitiveness, and we expanded investment accordingly,” Kim explained. “Coupang Eats has now grown into a service used by millions, and since its launch, South Korea’s food delivery market has expanded more than fourfold.”<\/p>\n
He also noted that Rocket Now, the on-demand delivery service operating in Japan, is still in the early investment stage, but when combined with Coupang Eats, it has already secured a sustainable business structure. Coupang is expanding on-demand delivery beyond food to non-food categories, with a strategy of leveraging its existing delivery network and operational capabilities to extend services into more product categories.<\/p>\n
“The businesses I’ve described today represent a single growth model operating at different stages,” Kim said. “South Korea commerce is in the long-term growth and profitability expansion stage, Taiwan is in the early growth stage, and on-demand delivery is in the mature stage in South Korea and the early investment stage in Japan.” He added, “All of these are developing on the same operating principles and growth strategy\u2014we’re applying the same playbook at different points on the growth curve.”<\/p>\n
Data Breach Recovery and Next Year’s Outlook<\/p>\n
Kim assessed that the company has largely moved past the impact of last year’s data breach. “Revenue grew 8% year-over-year excluding currency effects,” he said. “Most of the spending that was affected by the data breach has already recovered and is growing again.”<\/p>\n
Customer spending patterns were also analyzed positively. “Most customers showed no change in spending patterns and are continuing to spend at the highest levels in Coupang’s history,” Kim explained. “They are increasing spending at a pace similar to before last year’s data breach.” He particularly noted that “customers who reduced spending were a small minority of the total, and most of them have already returned. Some used other services for a few months, but after returning, they not only recovered to previous levels but are increasing spending beyond that, with the pace of spending growth similar to pre-incident levels.”<\/p>\n
It is also noteworthy that returning customers had higher purchasing power. “The customers who came back were, on average, those who spent more money than those who have not yet returned,” Kim analyzed. “The recovery trend is more pronounced on a spending basis than on a customer count basis.” While Wow Membership subscribers have already surpassed pre-incident levels, he noted that because new members initially spend less, it takes time for the membership growth effect to be reflected in revenue.<\/p>\n
He added that “excluding customers who left during the data breach and have not yet returned, total customer spending increased approximately 16% year-over-year\u2014a level similar to the spending growth rate of the product commerce business in the second quarter of last year, before the incident occurred.”<\/p>\n
On the profitability front, while the business is still feeling the impact of the incident, Kim expects normalization starting next year. “The company plans logistics infrastructure and fixed costs based on expected demand, but currently, revenue is temporarily lower than originally planned, which has increased the proportion of fixed costs,” he explained. “We could have cut costs significantly, but we chose not to in order to preserve long-term growth and customer experience.”<\/p>\n
“In the supply chain, we are also not fully benefiting from economies of scale driven by volume growth this year, but we expect recovery next year,” he said. “Marketing expenses, which we increased to reacquire customers, will also be reduced next year when the data breach impact is excluded from comparison periods.” He emphasized, “Starting next year, when the period affected by the data breach is no longer part of the comparison base, we expect the product commerce business to gradually recover its pre-incident growth rate and profitability structure.”<\/p>\n
AI as a Long-Term Growth Engine<\/p>\n
Kim highlighted artificial intelligence as a long-term growth driver. “Coupang’s customer base has steadily increased spending every year, including over the past year,” he said. “Even our oldest customers, acquired about 15 years ago, have increased their spending to nearly 10 times their first-year levels and are still growing today.” He explained that three trends are driving Coupang’s growth\u2014sustained spending increases from long-tenured customers, spending expansion among existing customer cohorts, and new customer acquisition\u2014and that all of these growth engines have been maintained over the past year.<\/p>\n
He attributed the increase in customer spending to expanding “wallet share.” “As product assortment expands, customers purchase more products where the traditional trade-off between price, selection, and delivery speed has been resolved,” Kim said. “The more Rocket Delivery products there are, the more time and money customers can save.” He also noted that “Coupang’s share of South Korea’s total retail market is still low compared to global leading companies,” expressing expectations that “as service competitiveness improves, the online market itself will also expand.”<\/p>\n
Kim projected that AI will accelerate this growth trajectory. “We view AI as a technology that creates a ‘multiplier effect,'” he said. “What AI amplifies is the logistics infrastructure we’ve built over the past 15 years, the operational data accumulated from processing billions of orders, and our direct relationships with tens of millions of customers.” He added, “Applying AI to customer experience can improve product discovery, personalized recommendations, and customer service, while in operations it can boost productivity and lower costs. We can also apply AI to high-margin businesses like advertising and FLC (fulfillment) to improve investment efficiency for sellers and brands and further expand market opportunities.”<\/p>\n","protected":false},"excerpt":{"rendered":"Bom Kim, Chairman of Coupang Inc., expressed confidence in the rapid growth of the company’s Taiwan operations and…\n","protected":false},"author":2,"featured_media":109292,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[381],"tags":[1137,4099,426,608,3642,4104,28211,441,56185,1955,607],"class_list":["post-109291","post","type-post","status-publish","format-standard","has-post-thumbnail","category-coupang","tag-ai","tag-bom-kim","tag-coupang","tag-coupang-eats","tag-coupang-inc","tag-data-breach","tag-dawn-delivery","tag-rocket-delivery","tag-rocket-now","tag-taiwan","tag-wow-membership"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/109291","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=109291"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/109291\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/109292"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=109291"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=109291"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=109291"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}