Seoul: U.S.-listed e-commerce giant Coupang Inc. announced on Wednesday that it experienced a net loss of $266 million in the first quarter, a significant shift from a net profit of $114 million during the same period the previous year. The downturn comes in the wake of a substantial customer data breach in South Korea.
According to Yonhap News Agency, Coupang also reported an operating loss of $242 million in the January-March period, compared to a net profit of $154 million a year ago. Despite these losses, the company saw an 8 percent year-on-year increase in sales, reaching $8.5 billion. The breach, impacting approximately 33.6 million customers, has heavily affected Coupang Korea, which contributes over 90 percent of the group's revenue, marking the company's largest net and operating losses since the last quarter of 2021.
Coupang had previously succeeded in narrowing its operating losses by 2022, achieving a return to operating profit in the third quarter of that year. However, the recent breach has disrupted this progress. Sales within their primary online shopping business, the product commerce segment, increased 4 percent year-on-year to $7.2 billion. Meanwhile, revenue from their developing offerings segment, which includes operations in Taiwan and the Coupang Eats food delivery service, surged 28 percent to $1.3 billion during the same period.
In response to the financial losses, Coupang executed a share repurchase of $391 million in the first quarter and has received board approval for an additional $1 billion stock buyback program. During a conference call, Bom Kim, Coupang's founder and chairman, attributed the first-quarter earnings decline to one-time vouchers issued as a measure to address the data breach, alongside "temporary inefficiencies" resulting from lower-than-anticipated demand following the incident.
Kim noted that the impact of the customer vouchers is expected to primarily affect the first quarter, with some residual effects extending into the early part of the second quarter. He emphasized that as demand stabilizes, the company's capacity and supply chain should recover, resolving the current inefficiencies.
Despite the challenges, Kim reported that Coupang had regained nearly 80 percent of the decline in its paid WOW membership base within the first four months of the year, following the breach. This recovery was driven by both returning members and robust new sign-ups. The number of customers who made at least one purchase through Coupang's core retail business rose 2 percent year-on-year to 23.9 million, though this figure fell from 24.6 million in the fourth quarter of 2025.
Looking forward, Kim expressed optimism regarding Coupang's long-term profitability, highlighting improvements in margins through operational efficiencies, supply chain optimization, and investments in automation and technology. He projected that annual margin expansion would resume the following year, supported by a strong belief in the company's long-term margin potential.