Buy Now, Pay Later (BNPL) is a short-term financing option that enables consumers to make their purchases and pay for them later. They are instant approval point-of-sales loans, commonly in interest-free installments, split over a period of a couple of months. Merchants welcome the use of BNPL payment methods as they help to boost sales and increase conversion rates at checkout.
The Buy Now, Pay Later (BNPL) market in the Asia-Pacific (APAC) region recorded significant growth in the last four to six quarters, according to researchandmarkets.com. Asia is home to the leading BNPL companies in the world. Countries such as Australia, India, China, Singapore, Indonesia, and Malaysia recorded strong demand for BNPL payment options driven primarily by a large, young population, high mobile Internet use, and market growth. APAC boasts a total of 400 million Internet users regionally.
Buy Now Pay Later has become the payment method of choice across APAC
The BNPL industry in the Asia Pacific recorded strong growth over the last four quarters in 2021, supported by increased e-commerce penetration influenced by the pandemic.
Further, BNPL payment adoption is expected to grow steadily with a Compound Annual Growth Rate (CAGR) of 33.3% from 2022 to 2028. Accordingly, it is expected that BNPL’s Gross Merchandise Value will increase from US$ 82806.9 million in 2021 to US$ 749226.9 million by 2028, according to researchandmarkets.com, the report published in January 2022.
With forecasts like this, we can expect to see increased investment and strategic partnerships in the sector—at least over the short to medium term.
Who are the startups leading the BNPL revolution?
Since its launch in 2019, Atome has grown into one of Asia’s largest BNPL platforms. The company has partnered with over 2,000 online and offline retailers in six key markets, including Singapore, Indonesia, Malaysia, Hong Kong, Vietnam, and mainland China.
The company uses the taglines, “Own the Extraordinary” and “Empowered Shopping” to attract consumers, with a focus on the consumer being in control of how and when they pay. The startup recently inked a partnership with AsiaPay to expand its reach amongst online and offline merchants in the APAC region.
Atome is part of Advance.AI, a Series-C AI-driven technology company headquartered in Singapore and with a presence across Southeast Asia, India, and mainland China. Learn more about how retailers are using AI to enhance the buyer experience.
Founded in February 2018, Hoolah is Asia’s leading Omni-channel, headquartered in Singapore. The platform allows consumers to buy what they need now and pay later via three interest-free monthly repayments without hidden fees. In September 2020, Hoolah extended its BNPL option to an in-store solution as well.
Founded in 2016, with over US$218 million raised and US$100 million to be followed in their next round, Akulaku is in the running to become South East Asia’s next BNPL unicorn. Akulaku started out specialising in online credit, wealth management, and digital banking before building its own e-commerce platform and branching into other business lines such as peer-to-peer lending (P2P).
Founded in 2020, Ree-Pay is a shopping platform that provides a buy now pay later facility with a comprehensive shopping experience. It was one of the first BNPLs in Vietnam to address a local market size of 80 million consumers, whose mission is to make shopping easier for everybody.
Cashalo was founded in 2017 by the co-founders of Skype and LU.com and launched by a Hong Kong-based FinTech startup, Oriente, to provide both offline and online credit to consumers in the Philippines. Cashalo uses proprietary technology to assess the applicant’s capacity to pay back loans via BNPL. It uses technology and data science to bring financial services to Asia’s unbanked populations.
Asia Pacific holds strong growth potential for the BNPL market. With no current BNPL leader, we can expect to see more companies entering the market and more competition. But it seems that only companies with the strongest digital service ecosystems will advance in this race, outrunning those who can only offer limited services.
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