Coupang Deploys AI Cameras as Kim Targets Mid-2027 Profit Recovery

Coupang is speeding up initiatives to boost efficiency and recoup profitability by integrating artificial intelligence (AI) cameras into its logistics operations. Chairman Bom Kim announced the deployment of AI cameras during the company's third-quarter earnings call on November 4 in South Korea, emphasizing the technology's role in reducing service costs through innovation.

These AI cameras work in tandem with Autobagger equipment to automatically adjust packaging sizes according to individual orders. The system facilitates personalized packaging, lowers processing time, and minimizes packaging material waste. Kim stated that incremental enhancements in individual processes, coupled with larger technological and operational advancements, could yield a more significant impact throughout the business.

Alongside logistics automation, expanding product assortment is identified as a crucial growth strategy. Q3 saw Rocket Delivery's item count rise by double digits, while Rocket Fresh's volume increased more than twice as fast compared to the overall Product Commerce segment. Coupang's Q3 revenue totaled $9.96 billion (about 14.22 trillion won), up 7% year-over-year in dollars.

However, adjusted operating income turned to a $450 million loss, primarily due to $248 million in fire-related costs at the Incheon fulfillment center. Other profitability factors included supply chain disruptions and fixed-cost burdens. Facility utilization remains lower as throughput volumes have not fully recovered. Kim views these profitability declines as temporary, predicting a recovery by mid-2027 as throughput volumes normalize and economies of scale restore cost efficiencies.

Customer metrics are positive, with the Wow membership subscriber count in South Korea hitting a record high, with returning members restoring their previous spending and new members exceeding historical levels. Coupang is also expanding internationally, including extending dawn delivery coverage and midnight order cutoffs in Taiwan, where Wow membership subscribers surged over 100% year-over-year.

The company plans to diversify into non-food instant delivery services and enhance Wow membership benefits in South Korea. CFO Gaurav Anand forecasts a 13%-14% year-over-year increase in consolidated revenue for Q4, with an expected improvement in adjusted EBITDA margin by 0.5 to 1.5 percentage points from the third quarter.