On the face of it, the negatives might look discouraging. But this echoes the problem with estimating metrics for Amazon (which was also covered recently). 

First, the company started reporting financials as per two segments from this calendar year onwards. The reason for this becomes immediately apparent: the company’s mainstay – « Product Commerce » (or e-commerce) – went from negative EBITDA to an increasingly higher levels across both Q1 and Q2 of this year. In fact, it went up 3,300% in the second quarter. 

Second, after a massive jump in net losses in 2021, net losses in the 6 months of 2022 is only a little over 18% of the entirety of the previous year. In the same period, it has already accrued well over half of the revenue accrued in the previous year. EBITDA losses are only 3% of what was in the previous year. 

Third, the drag is primarily led by its evolving « Developing Offerings » segment which includes the likes of Coupang Eats (restaurant ordering and delivery), Coupang Play (video streaming), fintech services, and advertisements related to these categories. In other words, a now-steadily improving mainstay segment is subsidizing the company’s forays in diversification. Even in this segment, EBITDA losses relative to revenues earned have been falling (while still being a net loss).

The « Active Customer » metric shows a little attrition but this has not been a significant detriment. This doesn’t necessarily mean « customer loyalty » (there is no logical reason why any customer would stay loyal to an e-commerce platform) but it does show that effective engagement strategies have been effective in retaining customers’ attention to a large extent. 

In hindsight, the high losses in 2021 looks to have been a highly calculated move. As per one source, the company jumped ten places to the No. 1 position in South Korea by the end of 2021.