Coupang (CPNG -0.32%) may not be a well-known company in the U.S., but it has certainly captured the hearts of consumers in South Korea, growing over the years to become the top e-commerce company in its home market.
Coupang's solid performance has captured the attention of sharp-eyed investors, which explains its respectable 25% increase in stock price in the last 12 months (as of this writing).
This article will delve deeper into the company and explore why investors are excited about it.
Image source: Getty Images.
The Amazon of South Korea and beyond
Amazon has arguably been the most successful e-commerce company over the last two decades, leading to numerous clones attempting to replicate its business model in their respective markets. Most either don't perform well or fail outright, except for a handful, such as JD.com in China and Coupang in South Korea.
Inspired by Amazon's customer obsession, Coupang strives to please its customers continually. One way is to provide a wide selection of products to customers, delivered at breathtaking speeds via its extensive in-house warehouse and logistics infrastructure.
For instance, consumers can order fresh groceries and millions of other general merchandise items by midnight and receive products by 7 a.m. the next morning. If customers are unhappy with the products, they can tap a button on the app and leave the item outside their door for pickup -- refunds will be processed immediately after pickup.
But that's just one part of the story. Coupang's efforts to delight its users have expanded far beyond their roots into other areas, including food delivery, online streaming, and services such as free appliance and furniture installations. Customers are eligible for all these perks for free if they join the Wow membership program. Unsurprisingly, customers love this approach, which explains Coupang's leading market share of 25% in South Korea.
Coupang's success in South Korea has also prompted the company to expand into new geographies, such as Taiwan, and new business segments via the acquisition of Farfetch. While these new business additions will take time to bear fruit, they will open up new growth avenues for the e-commerce company.
Coupang is executing well lately
Coupang is also delivering solid growth.
For the year ended Dec. 31, revenue surged by 24% (or 29% on an currency-neutral basis) to $30.3 billion on the back of growth in its e-commerce business and the acquisition of Farfetch. Coupang's growth continued into 2025, with revenue growing at 11% (or 21% on an currency-neutral basis ) to $7.9 billion.
Top-line growth is just one part of the story. Coupang has gradually improved its margins over time, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins improving from 3.9% to 4.8% in the last five quarters. The tech company targets adjusted EBITDA margins to exceed 10% in the long run, suggesting that there is still considerable room for improvement.
In short, while Coupang is already generating tens of billions in revenue, it is well-positioned to sustain its growth momentum, leveraging its world-class infrastructure, vast customer base, and customer-obsessed culture.
Coupang authorized a $1 billion share buyback plan
Coupang's recent share buyback plan is a significant milestone for several reasons.
One, it suggests that Coupang has evolved from a high-growth, loss-making company to one that's growing more sustainably and responsibly. To the extent that it can return excess cash to shareholders, such a move also signals the company's confidence in its future, suggesting that management may view the shares as undervalued compared to the company's prospects.
Additionally, with ample cash on its balance sheet ($6.1 billion in cash and cash equivalents, as of the time of writing), management's share buyback plan demonstrates its discipline in capital allocation, which complements its other investments in growth and innovation. It also suggests that management has a clear strategy for capital allocation, which is likely to enhance long-term shareholder value.
What it means for investors
Coupang is a rare example of a successful Amazon clone that has achieved excellent outcomes. While continuing to execute its expansion strategy, Coupang is also on track to return excess cash to shareholders through share buybacks. Investors seeking to diversify their stock holdings beyond the U.S. may want to keep this company under their radar.
