What: Coupang, the South Korean e-commerce giant, has acquired Farfetch and reported mixed financial results, raising concerns among investors about the future of this acquisition.

Why it is important: This acquisition highlights Coupang's ambition to expand into the luxury market and diversify its offerings, but it also raises concerns about the company's ability to manage Farfetch's unique market position and ongoing financial losses.

Coupang, often referred to as the "Amazon of Korea," has expanded its extensive service portfolio by acquiring the luxury e-commerce platform Farfetch. Despite achieving a notable increase in quarterly revenue, Coupang's net income saw a significant decline, partly due to the integration of Farfetch's losses. The acquisition has been met with skepticism as luxury brand partners, such as Kering, have distanced themselves, and key executives have departed. Coupled with an investigation by Korean tax authorities, these factors have heightened investor concerns. CEO Bom Kim remains optimistic, emphasizing plans to make Farfetch self-funding. The strategic acquisition aims to leverage Farfetch's established luxury brand relationships to enhance Coupang's market presence, especially outside Korea. However, the path to stabilizing Farfetch and achieving synergy remains challenging amidst broader industry uncertainties.

Farfetch owner Coupang: everything you need to know