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Coupang, the e-commerce group backed by SoftBank in South Korea, reported that quarterly losses increased even as the Covid-19 pandemic boosted its sales to a record high.
The company said Wednesday afternoon that first-quarter net loss jumped 180 percent year-on-year to $ 295 million, though revenue rose 74 percent to $ 4.2 million. The loss was slightly worse than analysts forecast.
Coupang’s disappointing results were the first after the online retailer debut in high profile stock market in New York in March, which valued it at more than $ 80 billion.
The initial public offering, which was the largest foreign exchange in the United States since Chinese e-commerce company Alibaba in 2014, helped boost SoftBank’s net profit with a record $ 46 billion in the most recent exercise of the Japanese technology group.
However, Coupang’s situation has worsened since its bright IPO.
The group’s valuation, which at some point reached $ 118 billion, has fallen to $ 62 billion and has been shaken by a series of deaths of its messengers and warehouse employees.
Coupang blamed the loss on stock compensation that cost $ 87 million and an increase in hiring and investment. The company has spent heavily on building a logistics network of 100 compliance centers in 30 cities with a fleet of more than 15,000 delivery drivers. Coupang boasts that almost 100% of its orders are delivered the same day or the next day.
The company said its active customers, or those who bought goods through Coupang at least once during the quarter, rose 21% to 16 million. Active customer spending rose 44% year-over-year to $ 262, the group said.
Coupang, founded in 2010, is the largest player in South Korea’s highly competitive e-commerce market.
The company projected the market to grow to $ 206 billion by 2024. According to research firm Euromonitor, South Korea’s e-commerce sector is likely to grow 11% this year, to $ 116 billion.
But the company’s growth has been clouded by the deaths of eight employees, including two subcontractors, whom unions and politicians attributed to overwork.
Coupang, among other investors including venture capital firm Sequoia Capital and US asset manager BlackRock, denies responsibility for the deaths. The company said only a work-related death has been officially recognized.
Coupang’s New York listed shares fell 2.5% on Wednesday ahead of the earnings announcement.
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