SEOUL, April 14 (Korea Bizwire) – Coupang, South Korea’s leading e-commerce operator, said Thursday its sales jumped more than three-fold in 2015 thanks to its delivery service, but its operating loss widened due to big investments in logistics capacity.
Coupang posted 1.13 trillion won (US$ 976.66 million) in sales last year, becoming the first social commerce operator to break the 1 trillion mark in the nation, its regulatory filing showed.
Despite the stellar sales growth, the firm logged 520 billion won in operating losses because of increased investment in logistics and its same-delivery service, it said.
Coupang launched an ultra-fast delivery service called “Rocket Delivery” in early 2014 by establishing its own logistics system and employing couriers. Last year, the company won a US$1 billion investment from Japanese telecommunications giant SoftBank Corp. and pledged to step up its logistics capacity with the fund.’
In response to rising concerns over its financial health and business model, the company said it will continue to expand investment to get ahead in the highly competitive market.
“We have enough firepower with the investment to achieve our long-term goal to introduce innovative, customer-centered service,” Coupang CEO Kim Beom-seok said in a release.
Its debt ratio stood at 152 percent, slightly higher than local retailer Lotte Shopping’s 138 percent and GS Retail’s 120 percent.
In addition to the same-delivery competition, Coupang has recently launched a cut-throat price war, advertising that its diapers and powdered milk are the cheapest in the nation.