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The Korea Herald
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THE INVESTOR
March 19, 2024

Retail & Consumer

Coupang’s short-term debt tops W865b

  • PUBLISHED :May 21, 2018 - 15:01
  • UPDATED :May 21, 2018 - 16:36
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[THE INVESTOR] Coupang’s short-term debt has topped 865 billion won (US$796.64 million), according to a recent audit report for the year 2017.

The company’s dues to suppliers increased by 140 billion won last year to reach over 448 billion won, while it owed other creditors around 417 billion won.

 



Industry watchers say one of the main reasons for this surge in the e-commerce giant’s short-term debt is its increasing investments for further growth here. In order to finance its expansion, the company delayed its payments to suppliers, even though it had adequate revenue as it sought to enhance its cash reserves. Coupang’s liquidity ratio -- total cash reserves to short-term borrowings -- dropped to 69 percent last year from 156.4 percent in 2015.

Moreover, the company also did not scale down its expenditure for stocking up inventories. Its inventories, estimated at around 147.8 billion won in 2016 increased to 244.5 billion won last year, while sales only increased by 40 percent to 2.69 trillion won from 1.95 trillion won.

Due to its aggressive investments, the firm’s sales jumped 40 percent on-year in 2017 to reach 2.68 trillion won, however, its operating loss also widened to 638.8 billion won from 560 billion won.

According to reports, Coupang is not the only local e-commerce firm to face these problems. The short-debt of its rivals WeMakePrice and Ticket Monster also increased to 70 billion won and 100 billion won, respectively, last year.

By Song Seung-hyun (ssh@herlardcorp.com)

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