Should You Invest in Coupang Right Now?

John Ballard, The Motley Fool

Mon, Jun 9, 2025, 6:30 AM 4 min read

• The e-commerce giant has built a solid competitive advantage in its home market of South Korea.

• Fast shipping speeds and other benefits have won it over 23 million customers -- and growing.

• International growth is the big question, but investors are not being asked to pay a steep premium.

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Coupang (NYSE: CPNG) is often referred to as the "Amazon of South Korea." It's a fast-growing e-commerce store that is following a strategy similar to its U.S. counterpart by offering a range of services like food delivery (Coupang Eats) and entertainment (Coupang Play) to supplement its online retail business.

The thing is, Coupang is not trying to be the next Amazon. It started out years ago as an eBay-like marketplace. Even though Coupang was profitable, founder and CEO Bom Kim didn't like the direction in which the company was headed and decided to completely restructure the business into what it is today.

Since 2018, the company has grown revenue from $4 billion to $31 billion on a trailing-12-month basis. It dominates the Korean e-commerce market. While it's uncertain how far Coupang might be able to expand beyond South Korea over the long term, the stock is offering a reasonable valuation that may undervalue its prospects in existing markets.

On a currency-neutral basis, Coupang has delivered consistent growth of 20% or more since its initial public offering in 2021. It entered 2025 with continued momentum, with revenue up 21% year over year in the first quarter, excluding currency changes.

Coupang has built a strong advantage with its logistics infrastructure that can deliver orders overnight to customers living in high-density population centers. This has kept competitors like Amazon at bay, allowing Coupang to gain over 23 million customers, and it's still growing. Its active customer count grew 9% year over year last quarter.

Moreover, Coupang is seeing its free cash flow and margins improve as it scales investments and grows revenue. It generated $1 billion in free cash flow on a trailing-12-month basis, which is a notable improvement over the negative free cash flow reported just a few years ago. Investments in technology, automation, and robotics are benefiting its ability to deliver packages faster while reducing costs.

Investors should expect Coupang's free cash flow to increase over the next several years, which could benefit the stock.

Coupang has a solid lead in South Korea, but investors need to know if its strategy will work outside of its home market. On that score, there are early signs that Coupang could be successful expanding in select international markets.