Coupang's mounting losses threaten growth model amid regulatory pressure

Coupang Inc., the U.S.-based operator of Korea's largest e-commerce platform, accumulated 1.83 trillion won ($1.28 billion) in operating losses in the first nine months of this year, as a data breach and regulatory pressure weigh on profitability.

According to results released Wednesday, Coupang posted an operating loss of 642.3 billion won in the third quarter, following losses of 835 billion won in the second quarter and 354.5 billion won in the first quarter.

The third-quarter loss included 354 billion won in expenses related to a July fire at its Incheon fulfillment center. The company also continued to bear costs from customer compensation following last year's data breach. A 624.7 billion won Fair Trade Commission (FTC) fine weighed on second-quarter earnings.

The accumulated losses have nearly erased the 1.9 trillion won in operating profits Coupang generated between 2023 and 2025.

Despite the losses, third-quarter revenue reached a record 14.22 trillion won, while active customers increased 2 percent year-on-year to 25.2 million. Adjusted earnings before interest, taxes, depreciation and amortization stood at $116 million, with a margin of 1.2 percent, down 329 basis points year-on-year.

Coupang could face additional pressure in the fourth quarter, with possible fines of up to 360 billion won over alleged unfair business practices involving its food delivery platform, Coupang Eats.

The FTC is reviewing allegations that Coupang Eats demanded preferential treatment from restaurants and that the company engaged in illegal tying through its WOW membership program.

The preferential treatment case concerns allegations that Coupang Eats required restaurants to offer prices and minimum order amounts no less favorable than those on competing platforms. Coupang proposed a voluntary corrective plan worth 60 billion won, but the FTC rejected it. The tying case centers on WOW membership, which bundles shopping, food delivery and streaming benefits for 7,890 won a month.

Coupang's growth has relied on investing in logistics infrastructure ahead of anticipated demand. But when demand falls short, its extensive fixed-cost structure puts pressure on margins amid an uneven recovery in demand.

Coupang founder Kim Bom-suk, also known as Bom Kim, sought to reassure investors, saying customer spending patterns remained healthy. Members who returned after leaving following the data breach incident had resumed spending at previous levels, while those who stayed were spending at record levels. New sign-ups, he said, had more than filled the membership gap, although newer customers typically take time to increase their spending.

Kim said WOW membership in Korea had reached its highest level ever, with net additions exceeding historical rates. He reiterated that Product Commerce was on track to recover to pre-incident profitability levels by the middle of next year, as the company moves past the affected periods and marketing spending tapers.