When it comes to e-commerce, every U.S. investor knows who Amazon is, but South Korea-based Coupang (CPNG -1.38%) could be like investing in the e-commerce giant at a somewhat earlier stage. In this Fool Live video clip, recorded on Sept. 15, Fool.com contributors Danny Vena and Jason Hall, along with senior analyst Asit Sharma, discuss why investors should keep Coupang on their radars. 

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Danny Vena: I'm going to kick off the next recent IPO with a company that folks may not have heard of, particularly if you are a U.S.-based investor, you may not have heard of Coupang, ticker CPNG. While it's not a household name in the U.S., you'd be hard-pressed to find someone in its home of South Korea that doesn't know this company, which has been called the Amazon of South Korea.

The company's mission is to become integral in the lives of its customers so that they are left to wonder, and here's their mission, how did I ever live without Coupang? The company was founded in 2010 and really has modeled itself after its North American rival. It's copied some of Amazon's most successful features. It has what it calls Rocket Delivery, which is same day or next day delivery, which is made possible by the company's large and growing fulfillment network, again, taking a page from Amazon.

But here's an indicator of the company's reach: Roughly 70% of the South Korean population lives within seven miles of a Coupang logistics center. That gives the company a huge advantage when it comes to getting things to customers and getting it there quickly. The company is also known for its customer service. It's got a strong reputation there and it absolutely dominates this niche. In a country that has a population of more than 51 million, you have that many close to a fulfillment center. Now, in 2020, Coupang generated revenue of about $12 billion, up 91% year over year, up from 55% growth in 2019.

The company has a strong history of growth and going all the way back to 2017, the company grew revenue by 69% and then 44%. This is a pretty strong growth company. Now, the company has been losing money, but the pace of the losses is slowing. Just so you know, the company generated a net loss of close to $500 million last year, which is an improvement from a loss of about $700 million the year before. Now, this year, as we've seen with most e-commerce stocks, things are slowing a little bit, the explosive accelerating growth. Their revenue growth was 71% so far this year. Last quarter was its 15th consecutive quarter of growth over 50%. At the same time, the company's customers grew at 26% to 17 million, which you can infer that roughly one-third of the people in the country use its platform. Gross revenue only grew by 50%, but that requires an asterisk. The company had a warehouse fire and the insurance hasn't paid off yet. If you exclude the associated inventory writedowns, what you'll find is that gross profit increased 86% year over year.

Finally, Coupang has about $4.3 billion in cash, only about four million in debt, but it does have a about a billion in long-term leases on its books. One thing that I think is pretty interesting is, even after the IPO, which happened back in May, SoftBank, who is known for investing heavily in early stage companies, still holds about a third of the company's shares, 33%. Just for full disclosure, I am a Coupang shareholder. I rarely invest so soon after an IPO, but this is a company that I'm pretty excited about owning. Since they are really following the Amazon playbook, I think they could do remarkably well in their home country.

Jason Hall: I love the tailwinds, and it's a new IPO, but it's not a new business. Like I said, it's been around for more than a decade and I think that carries weight when you think about newer IPOs. It's a newer IPO, but it's not a new business. I wanted to share a quick screen if anybody else wants to jump in here too, because you talk about the losses. You look here and you see that big billion-dollar net loss over the trailing 12 months, last quarter alone, $518 million, but this is a sort of business we have to focus on the cash flows to because a lot of those losses are tied to sometimes non-cash expenses, amortization of assets, so the cash may already be deployed in capital. They're not losing that cash today.

If you look at the cash trends, they're much better, so operating cash over the past 12 months it has spent about $78 million in operating cash. With last quarter, positive operating cash flow. That's the trend for this sort of business that indicates their growth and bringing to scale. That's far more important to focus on right now within the context of where the business is and it's scaling up, than just getting caught up too much in the profits and losses.

Asit Sharma: Just want to add a few other big-picture thoughts on Coupang. I really like the point that Danny made about the investment from Masayoshi Son. His whole venture team is really focused on unit economics. They don't worry about what happens at the beginning of a business's cycle. If they think there's a chance to corner a market, they're behind that company. They've invested about $3 billion in Coupang so far in the life cycle. I think they're a ready source of capital as Coupang looks to spend another couple of billion and possibly more in becoming an even bigger inventory-based business. They actually own a lot of the inventory that goes over their platform, and expanding their logistics footprint even to a greater extent, as Danny said. They've got about 17 million customers, I think. Active customers, they think they can go to 34 million.

Like Danny said, they've basically cornered this really lucrative market. It's going to be so difficult for anybody else to come in and replicate what they've done over the past several years. I think the market has misunderstood the company a little bit. They are very focused on that P&L as Jason pointed out, but as Jason also showed you the operating cash flows, they're positive. Now, free cash flow is another story because they are investing in that infrastructure but I like their potential long-term. I think this is one that is not the kind of stock you're going to monitor on a day-to-day basis, sort of like Danny. If you're interested in it, buy some shares, forget about them for a few years and you might be surprised at the result.