The Asian market is booming for an online retailer with headquarters in Seattle. Not Amazon, though. Coupang is the market leader in South Korea.

An ambitious logistics business with plans to become Korea’s Amazon—and maybe even a growth phenomenon like Temu—will benefit greatly from the country’s dense population, its rapidly expanding scale, and other favorable market conditions. However, it must first overcome rivals like Temu, which has already started to grow in Korea.

Following last week’s announcement of its first year operating profit for 2023—$473 million—the New York-listed shares of SoftBank-backed Coupang have increased by 15%. It was a $1 billion loss only five years ago.

With a 23% year-on-year gain in net revenue and a 16% increase in the number of active users to 21 million (equivalent to nearly half of South Korea’s population), expansion certainly helped boost margins. The last three years have seen a doubling of revenue.

In reality, Coupang has mimicked Amazon’s strategy by investing substantially in its logistics infrastructure to enable faster delivery. With half of Korea’s 52 million people residing in Greater Seoul, Coupang benefits from the city’s high population density. Another option is Wow, the company’s subscription service that provides benefits like free shipping and is similar to Amazon Prime. With a 27% increase from the previous year, Wow reached 14 million subscribers by year’s end.

To be sure, Coupang isn’t without its long-term obstacles.

There is a lot of competition. Alibaba and Temu are just two of the new Chinese competitors making inroads into Korea. Although it has a modest lead over Korean internet behemoth Naver, the industry for online shopping in Korea is still very fragmented, with market leader Coupang controlling only around a quarter of the market.

Not to mention how quickly the Chinese players are growing. In January, for instance, Bernstein reports that Temu had 5.7 million active users in Korea, a 28% rise from the previous month. It wasn’t until July of last year that the Chinese corporation joined the market. Citi reports that AliExpress, Alibaba’s global e-commerce platform, had 9.5 million active monthly users in December, which is twice the number a year before. In 2018, AliExpress entered the Korean market. The two players still have less than 2% of the market, but their rapid growth could change that fast.

The strategy of expansion employed by Coupang is another potential threat. Because of its closeness to and similarities with the Korean market, the corporation has set its sights on Taiwan. But that could involve heavy investments and an additional set of competitors, including Shopee, which is already a major presence in nearby Southeast Asia. By paying $500 million to acquire Farfetch, a UK-based online luxury portal, Coupang is attempting to diversify its product offerings. We still don’t know how these new endeavors will turn out.

Shares are still way down since the company went public during the 2021 tech frenzy, even after the recent jump: 63% below their 2021 peak. Even though it still controls almost a quarter of the company, SoftBank reduced its investment.

But that means Coupang looks like a far better deal now, especially since it has begun to actually make money. Shares now trade at a more modest multiple of 1.3 times revenue, compared with around 7.6 times at the peak in 2021, according to S&P Global Market Intelligence.

Seattle-based and SoftBank backed e-commerce companies—at least two big ones anyway—have a reasonably good record. Coupang has a decent chance of joining those ranks, but it will have fight off Temu and its Chinese peers, and prove it can move successfully into new markets first.