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Insights from the Coupang analyst conference - Strong growth and expansion into new markets for Korean Amazon

The conference call on the quarterly results of Coupang ($CPNG (-6,17 %) ) showed impressively how the company is further expanding its further expanding its leading position in e-commerce. CEO Bom Kim started the year with an impressive sales increase of almost 6 billion US dollars - a growth of 23 % on a currency-adjusted basis.


Particularly pleasing was the increase in gross profit of 29 %. The company generated an adjusted EBITDA of 1.4 billion US dollarswith a margin of 4,5 % and a free cash flow of over 1 billion US dollars.


Coupang continues to do everything in its power to the best customer experience at the lowest at the lowest price. Through strategic innovations in the logistics and fulfillment infrastructure the company was able to increase same-day and dawn delivery capacities by 45%. Customers also benefit from extended order lead times for same-day deliverieswhile the range of Rocket Delivery new services such as the installation of large appliances, furniture, electronics and car tires. tires.


The fresh produce range was also expanded by 30 % - a niche with enormous potential, particularly thanks to the free same-day and dawn delivery model. Particularly exciting: Jeju Island is now supplied overnight with Rocket Delivery - an important milestone in expanding the delivery service to all regions.

At the same time, the increase in efficiency in logistics has a direct impact on profitability. Thanks to the optimization of the supply chain has reduced line haul costs by 16 %while the automation of the fulfillment processes almost doubled. was almost doubled. And there is still further potential here: the The degree of automation remains in the low double-digit rangewhich should lead to additional margin improvements in the medium term.


International expansion continues to gain in importance for Coupang. Taiwan remains the most important test market outside Koreaand the growth figures confirm the success. In the fourth quarter quarter, sales there rose by 23 % compared to the previous quarterlargely due to organic growth. In addition, the WOW membership program was introduced in Taiwan, successfully replicating Coupang's proven model from Korea.


Another major topic was the acquisition of Farfetchwhich was completed at the beginning of 2024. The company had previously struggled with with high losses and declining growth ratesbut Coupang has implemented significant operational implemented significant operational improvements. Farfetch is now operating at a break-even run rateand the platform still has 49 million monthly visitors in over 190 countries.


For the coming year, Coupang sees enormous potential in the further further scaling of high-margin business areas. The automation of fulfillment processes will be driven forward in order to further optimize the supply chain. further optimize the supply chain and improve the cost structure. In addition, the product range is being first-party and third-party offerings which not only strengthens the not only strengthens the customer offering, but also drives sales growth.


Coupang anticipates currency-adjusted sales growth of 20 % .. Particularly pleasing: the gross profit growth in the Product Commerce segment is expected to exceed sales growthwhich points to a further margin improvement which points to a further improvement in margins.

In the Developing Offerings Coupang expects an adjusted EBITDA loss of between 650 and 750 million US dollarswhich shows that the company is continuing to invest heavily here in order to expand new business areas.


In the subsequent Q&A part of the conference call, several key questions were raised.

Stanley Yang (JPMorgan) asked about the possible slowdown in the e-commerce market and its impact on Coupang. CEO Bom Kim explainedthat Coupang continues to grow strongly despite the macroeconomic uncertainties. continues to grow stronglyas the company only has a small small share of the overall retail market and market share through continuous optimization of service, selection and price. can continue to gain market share.


Eric Cha (Goldman Sachs) wanted to know the benefits of the technology investments. CFO Anand made it clear that the focus is on machine learning and generative AI to improve the customer experience and optimize operational processes.


Seyon Park (Morgan Stanley) was interested in the strategy following the restructuring of Farfetch. Bom Kim emphasized that operational efficiency has already been significantly increased and that the company is now focusing on profitability and sustainable growth.


The results of the conference call made it clear that Coupang remains on course for growth. The company is making targeted investments in technology, automation and new marketsto improve margins and exploit long-term market opportunities..

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