‘Buy now, pay later’ isn’t out for the count

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Hello reader,

Have you ever used a “buy now, pay later” (BNPL) service? I’ve only done so once, back in 2020, when I was straightening my teeth with Zenyum clear aligners. I decided to pay for the treatment in installments with Hoolah.

Since then, however, it seems like BNPL has lost its shine. Hoolah was acquired by ShopBack and became ShopBack PayLater, which in turn has been discontinued.

Meanwhile, Singapore startup Pace is winding up its business, even after acquiring competitor Rely’s assets, and Australian-listed Zip has exited Singapore.

However, despite the somewhat bleak landscape, BNPL in Southeast Asia isn’t dead just yet. Today’s premium story goes deeper.

Today we look at:

• Whether BNPL is really dead
• A Malaysian babycare startup that’s just raised funds
• Other newsy highlights such as Alibaba calling off Cainiao’s IPO and Mitsui & Co’s investment in LinkAja

Premium summary

Buy now, pay later, alligator

Image credit: Timmy Loen

Pure-play BNPL services may be struggling, but this mode of payment isn’t dead in the water.

• Eyes on ecommerce: Last July, TikTok announced it was partnering with fintech startup Atome to offer installment payment options on its ecommerce platform in Malaysia. At the same time, GoTo Financial head Thomas Husted said the fintech unit wants to be the preferred partner of TikTok Shop and is planning to deepen its consumer loan offerings on its own app. Shopee, meanwhile, plans to expand its BNPL service to all users and to offline channels as well.
• Leveraging an ecosystem: A BNPL offering as part of an ecommerce marketplace may be more viable than a standalone company providing the service. But that might not work for everyone: Bukalapak, for instance, gave up offering pay-later loans in February. BNPL works best if users already have a high propensity for spending on the platform and are tempted by incentives to increase their basket sizes.
• Entry point: For ecommerce companies, BNPL is a good first step into financial services, given that it is uncomplicated and largely unregulated in Southeast Asia. TikTok Shop’s foray into BNPL could mark its entry into the fintech arena as well, seeing that the biggest ecommerce players have always evolved along this path.

Read more: ‘Buy now, pay later’ is not dead

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