A protestor wearing mask of Coupang Chairman Kim Bom-suk takes part in a rally organized by an alliance of civic groups in front of the U.S. Embassy in Seoul, April 30. Yonhap
E-commerce giant Coupang reported its largest quarterly loss in more than four years, with CEO Bom Kim, also known as Kim Bom-suk, attributing the setback largely to a $1.16 billion customer restitution package following last year’s major data breach.
The New York Stock Exchange-listed company posted an operating loss of $242 million for the period, a $373 million decline from a year earlier and its largest loss since the fourth quarter of 2021.
Kim, who founded Coupang in 2010, said during a conference call that customer vouchers were one of two “distinct factors” pressuring profitability this quarter.
“I want to describe them separately because they behave very differently going forward,” he said. “The first is the customer vouchers we issued in response to the incident. These are one-time in nature. The bulk of the impact is contained to Q1, with a modest tail into the first part of Q2.”
Kim admitted in the call that the first three months of the year were “the low point in our product commerce revenue growth rate.”
He added that although the company is working to recover from heavy spending in the aftermath of a massive data breach disclosed last year, it will take time to restore operational health.
“Year-on-year growth will take time to fully reflect the underlying recovery. The months of paused compounding from the affected period continue to weigh on the compoundings even as customer behavior normalizes,” he said.
The other reason Kim cited for the first-quarter deficit was temporary inefficiencies in the company’s network caused by excess supply. He explained that Coupang typically preemptively builds capacity and supply-chain commitments based on projected demand and customer behavior, but the company misjudged this time.
“When an external event of this kind (last year’s data breach) disrupts that pattern, actual demand falls short of what those commitments were sized for, and we carry the cost of underutilized capacity and inventory secured through the period,” he said.
Source: Korea Times News
