Coupang, Profits from Structure – A Global Experiment by a Company that Achieved Ultra-Competitive Edge

Logistics & Supply Chain Strategy Briefing

STREAMLINE: Coupang, Profits from Structure – A Global Experiment by a Company that Achieved Ultra-Competitive Edge

May 23, 2025

Coupang's Q1 2025 results signify more than just numbers. Revenue of $7.9 billion (up 21% at constant exchange rates) and operating profit of $154 million (up 285%) demonstrate that a company that previously accepted losses has definitively transitioned to a profitable structure. With both e-commerce and food delivery now turning profits domestically, the focus shifts to whether this structural model can function in global markets.

TRENDS

Key Q1 2025 Metrics:

• Revenue: $7.9 billion (+21% at constant exchange rates)
• Operating Profit: $154 million (+285%)
• Adjusted EBITDA: $382 million
• Active Customers: 23.4 million (+9%)
• Net Revenue per Customer: $321 (+6%)

Growth rates and profitability indicators significantly outperforming market averages suggest that Coupang's structural efficiencies have reached maturity. Particularly noteworthy is the concurrent increase in both active customers and revenue per customer, indicating strengthened platform lock-in effects.

REAL ISSUES

The core of Coupang's profit model is 'FLC (Fulfillment & Logistics by Coupang),' which integrates Rocket Delivery with fulfillment services. By unifying first-party (1P) and third-party (3P) sellers within the same customer experience framework, they've achieved standardized service quality beyond simple logistics outsourcing.

Notable Indicators:

• 3P seller transaction growth rates several times higher than overall commerce average
• Gross profit margin 31.3% (+3.1%p), adjusted EBITDA margin 8%
• 25% increase in categories purchased per customer → visible expansion in repurchase rates and basket size

A distinctive feature is how fulfillment has evolved beyond delivery infrastructure to become a customer touchpoint structure. This represents Coupang's differentiated structural competitive advantage, stemming from a fundamental difference in approach rather than a simple business model change.

EVIDENCE & ANALYSIS

Coupang's Core Structure: 'Unified Fulfillment'

Rocket Delivery no longer simply means fast delivery. A platform structure delivering price, quality, choice, and speed as an integrated experience has become the core competitive advantage.

Coupang's Operating Formula Expanded to Food Delivery

Coupang Eats is considered the first case proving the replicability of the structure. Previously a second-tier service, Eats now records over twice the user base of Yogiyo.

• User Base: 11.01 million (+70.7%)
• 2024 Revenue: ₩1.88 trillion / Operating Profit: ₩21.7 billion
• Surpassing Baemin order volume in some metropolitan market areas

The notable point is how 'free delivery benefits' combined with 'commerce integration' have positioned food delivery as a repeat purchase structure.

Gap with Competitors Originating from 'Structure'

The difference in perspective—viewing logistics as a 'service strategy' rather than a 'cost'—is clearly evident.

Taiwan & Farfetch: How Far Has Global Structure Replication Progressed?

Growth Business Division Loss: –$168 million

This loss is estimated to come primarily from initial investments in the Taiwan business. According to the latest performance results:

• Taiwan: WOW membership launch, 500% product assortment increase, expanded direct brand partnerships
• Taiwan market revenue increased 78% year-over-year, 23% quarter-over-quarter growth
• Farfetch: Achieved EBITDA profitability in Q4 2024 (₩41.8 billion) one year after acquisition
• Currently restructuring toward cross-border e-commerce strategy

While initial results may seem limited, the key point is that the structural experiment has begun. Success will likely be determined by time and execution consistency rather than immediate numbers.

ACTIONS & MEASURES

Coupang's next phase strategies are expected to develop in the following directions:

1. Global Expansion of the FLC Model: Establishing the Rocket Delivery structure in Taiwan and enhancing WOW membership
2. Accelerating Farfetch Integration: Integrating luxury commerce with general commerce logistics systems
3. Vertical Category Expansion: Increasing market share in high-involvement categories like beauty and luxury
4. Integrated Logistics Infrastructure Enhancement: Expanding AI-based prediction systems and automated fulfillment centers
5. Membership-based Cross-selling: Deepening customer lock-in through enhanced integrated benefits across commerce and delivery

In Taiwan particularly, they're expanding their fulfillment-centered model while demonstrating flexibility to local consumption patterns. Meanwhile, Farfetch is evolving into a new business model in the global luxury market by applying Coupang's logistics expertise.

INSIGHTS

Coupang's Q1 2025 results hold significance beyond short-term performance. A company that created a profitable structure in the domestic market is now expanding that structure to different industries and countries.

Key Insights:

1. Profitability indicates structural completion. Coupang's 10-year experiment has now been validated as a fully functional business model.
2. All growth—across commerce, food delivery, and global expansion—is being planned within the same fulfillment-centered structure.
3. Taiwan and Farfetch are experimental grounds for 'structural transplantation.' Whether the model proven in Korea can function in different environments will determine Coupang's next growth phase.
4. Coupang has redefined logistics as an 'opportunity' rather than a 'cost,' forming the foundation for evolution from e-commerce into a service platform across various industries.

The second half of 2025 will likely see the next chapter of Coupang unfold, depending on how this structure performs in global markets.

© 2025 BEYONDX. All rights reserved. This is part of the STREAMLINE: Beyond Logistics Playbook by BEYONDX series.