What: Coupang reports 24% revenue growth to USD 30.3 billion in 2024, while successfully reducing Farfetch's losses to USD 34 million through aggressive operational restructuring.

Why it is important: The company's strategy reveals the challenges and opportunities in combining mass-market e-commerce expertise with luxury retail operations, as traditional market boundaries continue to blur.

South Korean e-commerce powerhouse Coupang has demonstrated robust growth with a 24% year-over-year revenue increase to USD 30.3 billion in 2024. While annual net income reached USD 154 million, this represented a significant decline from the previous year, though adjusting for one-off items reveals a healthier USD 407 million figure. The company's fourth-quarter performance showed continued momentum, with net revenues of USD 8 billion, marking a 21% increase on a reported basis and 28% surge on an FX-neutral basis. The Farfetch acquisition has shown promising results, with the luxury platform's losses significantly reduced to USD 34 million, compared to its previous USD 98.7 million loss. However, this turnaround has come at a cost, with the elimination of key luxury services and the departure of several prestigious brands. Despite increasing competition from Chinese e-commerce giants and new strategic alliances in the Korean market, Coupang remains optimistic about its growth prospects, particularly in Taiwan, where its Rocket Delivery service has gained significant traction with 23% quarter-over-quarter revenue growth.

IADS Notes: Coupang's latest financial results reflect broader transformations in the Asian e-commerce landscape. The Shinsegae-Alibaba alliance represents mounting competition to Coupang's market dominance, while regulatory challenges are evidenced by the company's USD 102 million fine for manipulating search algorithms . The Farfetch acquisition's progress, showing reduced losses from USD 98.7 million to USD 34 million, demonstrates Coupang's ability to improve operational efficiency, though recent analysis suggests this comes at the cost of luxury customer experience, with several premium brands severing ties. The company's international expansion, particularly in Taiwan, aligns with broader trends as Korean e-commerce platforms increasingly diversify into luxury retail amid domestic market saturation. However, Coupang's aggressive cost-cutting strategy at Farfetch, while improving short-term financials, raises questions about long-term sustainability in the luxury segment, especially as competitors like Mytheresa demonstrate success through maintaining premium service standards .

Coupang bets on Farfetch turnaround while rivals gain ground