A once-in-a-generation investment opportunity: 1 fast-growing e-commerce company you can buy now and hold forever

Amazon is one of the best-performing companies in history. The e-commerce and technology giant has grown more than 1,000-fold since going public, benefiting, among other things, from consumers’ massive shift from in-person to online shopping.

It’s still a great business, but with a market capitalization of $1.9 trillion, it’s highly unlikely it will repeat the gains of the last few decades. This could be disappointing for new investors who missed out on most of Amazon’s gains. But what if I told you that investors would be able to own shares of the next Amazon outside of East Asia?

Enter Kupang (CPNG -1.38%). The South Korean e-commerce giant is taking the country by storm and expanding into new markets. Here’s why, at today’s price, this could be a once-in-a-generation investment opportunity.

Amazon in South Korea

Founded in 2010 as Groupon clone, Coupang started copying Amazonbusiness model, but it met the needs of the South Korean market. It has many similarities to Amazon’s retail business – subscription memberships, vertically integrated shipping, video streaming – as well as things that help it succeed in the small Asian country. For example, it allows reusable return boxes to be left at the door to return parcels that Coupang drivers pick up.

It is these types of customer value propositions that have catapulted Coupang into the leading e-commerce platform in South Korea. Last quarter, it generated revenue of $7.1 billion, up 23% year over year, on a currency neutral basis and excluding the Farfetch acquisition. As the external market for other e-commerce retailers develops, gross profit is growing much faster and increased 27% in the most recent quarter, excluding Farfetch.

These growth rates are much faster than the entire e-commerce market in Coupang. Retail spending in South Korea is around $500 billion each year, giving Coupang plenty of room to grow if it can convince more customers to adopt its offerings in things like food and grocery delivery.

Expanding to Taiwan?

Coupang still has plenty of runway to expand in South Korea, but it’s not a giant market like the United States or China. Fortunately, management is thinking ahead and testing various ways to expand into other regions in Asia with consumers affluent enough to spend on the e-commerce platform. It recently landed in Taiwan as a place for big investments.

It is establishing infrastructure in the region to replicate the vertically integrated offering it has in South Korea and is experiencing strong initial growth. Coupang’s “offer development” revenue grew 143% year-over-year, excluding Farfetch, with the largest growth seen in Taiwan. The market is currently small and unprofitable, but considering the island nation is home to almost 25 million people, Coupang has a great opportunity to expand its e-commerce platform beyond Korea.

CPNG Free Cash Flow Data by YCharts

Shares are cheap for patient investors

Today, Coupang is listed with a market capitalization of $38 billion. It generated $1.45 billion in free cash flow over the last 12 months, with a trailing price-to-free cash flow (P/FCF) ratio of 26, which is close to the market average. However, I believe the stock is positioned to deliver better-than-market returns over the next five years and beyond.

First, the company’s free cash flow is depressed due to all the capital spending on growth over the last 12 months, especially in Taiwan. During that time, it spent nearly $1 billion on new infrastructure. It is also growing faster than the market average, achieving an over 30% increase in gross profit. This level of growth won’t last forever, but I think the company will continue to grow at double-digit rates for many years to come.

At a earnings multiple close to the market average, I believe Coupang is a cheap stock for patient investors who want to hold it for the long term.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Brett Schafer holds positions at Amazon and Coupang. The Motley Fool covers and recommends Amazon and Coupang. The Motley Fool recommends United Parcel Service. The Motley Fool has a disclosure policy.