Coupang Inc bets on Rocket Now in Japan — can it succeed on second try?

Coupang Inc has extended the operating hours of its Japanese food delivery service, Rocket Now, to 4 a.m. Rocket Now is one of the areas Coupang Inc has been actively investing in, alongside its rocket delivery and Farfetch operations in Taiwan.

Starting May 19, Rocket Now expanded its delivery window from 8 a.m.–3 a.m. to 7 a.m.–4 a.m. the following day, according to industry sources. "The extended hours are intended to improve the convenience of food delivery," a Rocket Now spokesperson said.

Coupang Eats, Coupang Inc's domestic food delivery platform, also introduced 24-hour delivery service across six major metropolitan cities in South Korea starting May 19. Coupang Eats operates delivery services in partnership with convenience store chains CU and GS25. Rocket Now in Japan is expected to gradually expand its delivery hours in a similar fashion.

Coupang Inc launched Rocket Now in January last year, starting with select areas of Tokyo. The service has since expanded to Japan's five major cities — Osaka, Nagoya, Fukuoka and Sapporo — and beyond. Combined downloads on Google Play and the Apple App Store have surpassed 6 million since launch.

This is not Coupang Inc's first foray into the Japanese market. In June 2021, the company established a Japanese subsidiary, Coupang Japan, and ran a pilot quick-commerce service in parts of Tokyo promising delivery in as little as 10 minutes. The venture folded in March 2023, roughly two years in, weighed down by the cost of building micro-fulfillment centers in urban areas and a local culture centered on cash payments.

The renewed push into Japan comes after Coupang Inc found reason for optimism in Taiwan, where it is growing its rocket delivery and Farfetch businesses. The company opened its fourth logistics center there in March. Rocket delivery now covers 70 percent of Taiwan. Sales from that business reached $4.942 billion last year, up about 38 percent from the previous year, while investment hit a record $995 million.

Costs are the central challenge at this early stage. The adjusted EBITDA loss for the "developing offerings" segment widened 96 percent year on year to $329 million in the first quarter, even as sales grew 28 percent to $1.328 billion. The expanding revenue base has not been enough to offset the investment burden weighing on profitability — a dynamic that applies equally to Rocket Now in Japan.

Coupang Inc Chairman Bom Kim said during a February earnings conference call that the Rocket Now business had helped the company "understand the market opportunity and the value customers care about," adding that customer retention and engagement trends were "promising" despite the service being in its early stages.