Coupang delivery vehicles. Korea Times file

By Lee Kyung-min

Coupang registered $66.17 million (86.2 billion won) in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the second quarter of this year, marking the first surplus since the launch of the e-commerce giant in 2014, it said Thursday.

Operating profit came to $67.14 million, down 87 percent from the year before and falling below 100 billion won for the first time. Sales stood at $5.03 billion, up 12 percent year-on-year. It is lower than the $5.11 billion in sales achieved in the first quarter, but the rapid depreciation of the Korean currency against the U.S dollar led to the record-high figure.

Chief among the drivers of the robust earnings was a 27 percent year-on-year increase in sales reported by the product commerce division encompassing overnight delivery services and fresh produce deliveries.

The strong performance led to the price of the New York Stock Exchange-listed firm surpassing $20 during intraday trading for the first time since April 4. It closed at $19.76, up more than 4 percent from the previous session.

Its small partner firms and merchants using the Coupang platform are thriving. The sales of a combined 157,000 small sellers on Coupang platform doubled as of last year, from two years earlier before the onset of the COVID-19 pandemic.

This is a feat the e-commerce giant characterizes as a rare upbeat outcome, since almost all small businesses in Korea during the years of pandemic saw their businesses tank due to stricter social distancing rules including movement bans and operating hour cuts.

The firm says the strong second-quarter results were lifted by fortifying technological assistance, infrastructure, automation and supply optimization as it did in the previous quarter.

Market watchers say the e-commerce giant turning profitable is explained in large part by the economy of scale, a microeconomic term that refers to the cost advantages that enterprises obtain due to their scale of operation.

They are typically measured by the amount of output produced per unit of time. A decrease in per-unit cost of output equates to an increase in scale.

Coupang has storage centers and delivery service facilities across the country, which has been enabled by hefty investments.

Per-capita spending by its devoted customers rose 20 percent in the second quarter, year-on-year, due chiefly to a $500 million investment in the same period made to strengthen its paid Wow membership benefits. The $500 million is a year-on-year increase of over 50 percent.

The increase in monthly membership fees to 4,990 won in June, up from 2,900 won, will be factored into the earnings performance of the third quarter and onwards.