Coupang, South Korea’s largest online retailer, has reported its first net loss since 2022, posting a staggering $77 million deficit for the June quarter. This loss is substantially higher than analysts’ estimates of only $11.7 million. While the company enjoyed a robust 25% increase in net revenue, reaching $7.3 billion, the impact of its acquisition of Farfetch Holdings Plc and a hefty regulatory fine overshadowed its achievements.

The acquisition of Farfetch, a luxury e-commerce platform, has proven unprofitable for Coupang thus far. Stripping away the losses from this deal and a fine imposed by Korean authorities, which amounted to about $102 million, Coupang would have reported a commendable net income of approximately $124 million.

CEO Bom Kim has indicated a commitment to invest in speeding up deliveries across its markets despite these challenges. Expectations are set for Farfetch to achieve nearly positive adjusted earnings before interest, taxes, depreciation, and amortization by the end of 2024. However, the regulatory landscape complicates matters; rebuttals are underway against claims by the Korean Fair Trade Commission, which accused the company of favoring its own brands over third-party sellers.

As Coupang seeks to expand into new markets, such as Taiwan, it faces stiff competition from rivals like Alibaba’s AliExpress and PDD Holdings’ Temu. The challenge for Coupang lies in balancing rapid growth and regulatory compliance while ensuring profitability in an evolving e-commerce landscape.