Coupang’s Investments Pay Off: Its Q1 2025 Company Results Indicate Growing Efficiency

Coupang recently released its financial results for Q1 2025 and business looks good for the South Korean eCommerce leader. In the first quarter of 2025, Coupang reported a year-on-year revenue increase of 21% (on a constant currency basis). On a gross profit level, Coupang achieved a 31% increase, and its gross profit margin has grown as well.

Here is what the numbers tell about Coupang’s business approach and in how far they align with ECDB predictions for the year.

Coupang’s Investments Increased Later Efficiency

In another blog post on Coupang’s dominance in South Korea, ECDB identified Coupang as a customer-centric and asset-heavy business. This means that it heavily invested in services which make it stand out as an eCommerce retailer, like speed of delivery, availability of products and price competitiveness.

This approach is visible in its financial development, most precisely revenue related to gross profit. The two relate in the sense that gross profit measures the efficiency of operations, or how much profit is made after accounting for the expenditure it takes to cover production costs.

Visually, when the gross profit margin widens, a company becomes more efficient in production, as the costs per unit decrease. This is evidently the case with Coupang.

Growing Gross Profit Margin Is Good News

Coupang has made massive investments in infrastructure and customer retention services, in essence to build up a reputation and loyal customer base. Not for nothing is it called the Amazon of South Korea, as its business concept aims at providing consumers with their every whim and fancy.

The progress of Coupang’s gross profit margin illustrates how over time theCoupan share of gross profit became larger in relation to company revenues. It is a simple economic assumption coming to fruition here, which is that scale drives efficiency: as fixed costs are spread across a growing volume of sales, the company retains more from each dollar earned.

Financial Results of Q1 2025 Hint at Further Growth

So what do the financials say? Coupang generated revenues of US$12.0 billion in 2020 and a gross profit of US$2.0 billion, which means that its gross profit margin was 16.6% in that year (note rounding differences). It managed to increase both these key performance indicators (KPIs) steadily over the course of the next years, resulting in revenues of US$24.4 billion and gross profit of US$6.2 billion by 2023. In relation to this, gross profit margin was 25.4% in that year.

Up until then, Coupang’s net income has been negative. Basically, all the other associated expenses of Coupang’s operations exceeded the revenue it generated, which is why it was unprofitable. But 2023 was the first year in which Coupang achieved positive net income.

Together with a consistently improving gross profit margin, this indicates that Coupang’s asset-intensive strategy has become increasingly efficient over time. In the first quarter results of 2025, Coupang reported a gross profit margin of 29.3%, which is a 2-percentage point increase from Q1 2024.

Outlook: Coupang Continues to Move Upward

The bottom line is this: Coupang is on the profitable path. Considering its market position at the moment, the development is not expected to slow down anytime soon. The recently discussed proposition of Coupang’s acquisition of luxury marketplaces, in this case Farfetch, YOOX and Net-a-Porter, has not had negative consequences on its financials so far.