South Korea is much different than the United States, both culturally and geographically. It has only a small percentage of the land mass, a population centered around one urban area (Seoul), and just a small sliver of the physical retail locations such as shopping malls.

All these qualities have allowed e-commerce upstart Coupang (CPNG -0.52%) to thrive since its founding in 2010. It is now the largest online shopping platform in the nation and is still growing like gangbusters. And yet, the stock is down 66% since it went public in 2021. I think this makes Coupang a great opportunity for growth stock investors at these prices.

Here's why you should buy shares of Coupang before the next bull market in technology stocks. 

A better e-commerce business than Amazon?

Coupang might be the only e-commerce business in the world with a better value proposition than Amazon. Through its Rocket Wow membership service, Coupang shoppers are able to receive 99% of their orders within a day, even fresh groceries. If a customer orders an item before midnight, they will receive it on their doorstep by 7 a.m. or earlier. Returns are seamless through Coupang's reusable package system. Customers just click on the Coupang website that they want to return an item, leave it on their doorstep, and a Coupang driver will pick it up free of charge.

How is the company able to offer such quick and customer-friendly services that are better than Amazon? For one, investors should remember that South Korea is much smaller than the United States, meaning packages don't have to travel nearly as far. But second -- and more important -- Coupang has built a highly automated logistics network that vertically integrates its operations. Coupang has its own warehouses and delivery trucks that will store and deliver packages to customers for its merchants. No other e-commerce platform in South Korea comes close to this level of vertical integration, giving Coupang an advantage over the competition.

Profits are arriving and should only grow

As the company has increased its scale, we are finally starting to see the operating leverage that comes with Coupang's vertically integrated business model. 

Last quarter was a prime example. In the second quarter of 2023, Coupang's revenue grew 16% year over year to $5.8 billion. Gross profit grew twice as quickly as revenue, up 32% to $1.5 billion in the period. This led to a flip from a net loss in 2022 to $145 million in positive net income in the third quarter.

While just a 2.5% net income margin, there is plenty of room for Coupang to expand this margin as the business matures, especially if gross profit continues to grow at a quicker pace than revenue. Over the long term, management believes it can hit an adjusted profit of at least 10%.

Why the stock is ready to soar

Even though Coupang is seeing a profit inflection, its stock price is still in the doldrums. As of this writing, shares trade at a market cap of $31 billion, less than half of its IPO value.

Over the past 12 months, Coupang has generated $22 billion in revenue. If its profit margin can reach 10% like management thinks, that would equate to $2.2 billion in net income, or a price-to-earnings ratio of just 14, which is significantly cheaper than the market average.

What makes this even more appetizing is Coupang's potential to grow over the next five years. The Korean commerce market (including offline retail) is projected to hit $547 billion by 2026. This is a huge opportunity for Coupang to go after, giving it a long runway to gain market share with its superior customer value proposition. 

Combine its cheap price and potential for growth, and Coupang is perhaps my favorite technology stock for investors to buy right now.