Southeast Asian Buy Now Pay Later Growth Opportunities

Southeast Asian Buy Now Pay Later Growth Opportunities

Market Expansion, Technology Capability, and Large Partner Ecosystem to Continue Transformational Growth

RELEASE DATE
28-Jan-2022
REGION
Asia Pacific
Research Code: PC75-01-00-00-00
SKU: TE04064-AP-MT_26217
$4,950.00
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Description

The payments industry is now lucrative for start-ups to tap into new niche market segments and promote financial inclusion in groups with limited access to credit services from banks. The buy now, pay later (BNPL) solution has emerged as an alternative credit payment for consumers, enabling them to make purchases without paying the total amount upfront. The solution allows consumers to make monthly payment installments within three to six months with no interest charge. BNPL solutions are increasingly available online and in physical stores.

The Southeast Asian BNPL space is highly fragmented and competitive, comprising BNPL providers, electronic commerce (eCommerce) companies, multiservice providers, and banks. Strongly funded participants dominate the market, potentially pushing weaker participants out of business in the long run. Market consolidation is ongoing and expected to continue as bigger participants acquire smaller ones. Domestic participants will embrace consolidation for more capital and market share to compete with leading global BNPL providers, which are expected to penetrate the market in the region.

Next-generation technologies in lending and payments solutions, combined with big data, artificial intelligence, and machine learning, will help BNPL stakeholders deliver services more effectively and securely. These technologies enable providers to map customer profiles based on credit history, spending habits, and social media analytics for a complete assessment of customer creditworthiness and risk to improve the credit underwriting process. Advanced technologies are critical to generating market growth. Cloud-hosted and modular solutions to fit the needs of merchants and end-customers will see widespread adoption among BNPL providers. These providers are likely to expand their service portfolio with holistic solutions. Increasing collaborations between banks, leading regional payment providers, and local stakeholders, such as merchant aggregators and payment acquirers, will accelerate growth opportunities for BNPL.

BNPL start-ups with promising advanced technology strategies and investment support, such as Kredivo, Atome, and Akulaku, have established their bases and generated profit. These providers aggressively expand their footprint in emerging markets to broaden their customer base while enhancing BNPL capabilities. Other stakeholders in the BNPL market, such as established eCommerce (Shopee, Lazada, Traveloka) and ride-hailing companies (Grab, GoJek) have transformed their businesses to offer value-added services, including BNPL solutions, and create new revenue streams. Ecommerce and mobile commerce (mCommerce) critically drive BNPL adoption and will continue to do so in the long run.

The Frost & Sullivan study covers the BNPL market in key Southeast Asian countries: Indonesia, Cambodia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. The study bases the market overview on online and physical/in-store merchants, offering insights into key companies in the region and providing market forecast discussions and total transaction volume forecasts based on the market’s growth drivers and restraints.

Author: Dewi Rengganis

Table of Contents

Why Is It Increasingly Difficult to Grow?

The Strategic Imperative 8™

The Impact of the Top Three Strategic Imperatives on the Southeast Asian Buy Now Pay Later (BNPL) Market

Growth Opportunities Fuel the Growth Pipeline Engine™

Scope of Analysis

Market Definitions

Key Questions Addressed

Market Segmentation

Key Competitors

BNPL Value Chain

Key Growth Metrics

Growth Drivers

Growth Restraints

Forecast Assumptions

Transaction Value and Active Users Forecast

Transaction Value Forecast Analysis

Pricing Trends

Competitive Environment

Revenue Share

Revenue Share Analysis

Key Growth Metrics

Transaction Value Forecast

Transaction Value Forecast Analysis

Key Growth Metrics

Transaction Value Forecast

Transaction Value Forecast Analysis

Market Analysis—Cambodia

Market Analysis—Indonesia

Market Analysis—Malaysia

Market Analysis—Philippines

Market Analysis—Singapore

Market Analysis—Thailand

Market Analysis—Vietnam

Companies to Watch—BNPL Providers

Companies to Watch—Digital Commerce Providers

Growth Opportunity 1—Credit-as-a-Service (CAAS) for Faster Time to Market

Growth Opportunity 1—Credit-as-a-Service (CAAS) for Faster Time to Market (continued)

Growth Opportunity 2—Next-Generation Data Management to Enable Hyperpersonalization and Assess Credit Risk

Growth Opportunity 2—Next-Generation Data Management to Enable Hyperpersonalization and Assess Credit Risk (continued)

Growth Opportunity 3—Cross-border Pay Later Service Offerings to Generate New Revenue Opportunities

Growth Opportunity 3—Cross-border Pay Later Service Offerings to Generate New Revenue Opportunities (continued)

Conclusion and Recommendations

Three Big Predictions

Your Next Steps

Why Frost, Why Now?

List of Exhibits

Legal Disclaimer

Related Research
The payments industry is now lucrative for start-ups to tap into new niche market segments and promote financial inclusion in groups with limited access to credit services from banks. The buy now, pay later (BNPL) solution has emerged as an alternative credit payment for consumers, enabling them to make purchases without paying the total amount upfront. The solution allows consumers to make monthly payment installments within three to six months with no interest charge. BNPL solutions are increasingly available online and in physical stores. The Southeast Asian BNPL space is highly fragmented and competitive, comprising BNPL providers, electronic commerce (eCommerce) companies, multiservice providers, and banks. Strongly funded participants dominate the market, potentially pushing weaker participants out of business in the long run. Market consolidation is ongoing and expected to continue as bigger participants acquire smaller ones. Domestic participants will embrace consolidation for more capital and market share to compete with leading global BNPL providers, which are expected to penetrate the market in the region. Next-generation technologies in lending and payments solutions, combined with big data, artificial intelligence, and machine learning, will help BNPL stakeholders deliver services more effectively and securely. These technologies enable providers to map customer profiles based on credit history, spending habits, and social media analytics for a complete assessment of customer creditworthiness and risk to improve the credit underwriting process. Advanced technologies are critical to generating market growth. Cloud-hosted and modular solutions to fit the needs of merchants and end-customers will see widespread adoption among BNPL providers. These providers are likely to expand their service portfolio with holistic solutions. Increasing collaborations between banks, leading regional payment providers, and local stakeholders, such as merchant aggregators and payment acquirers, will accelerate growth opportunities for BNPL. BNPL start-ups with promising advanced technology strategies and investment support, such as Kredivo, Atome, and Akulaku, have established their bases and generated profit. These providers aggressively expand their footprint in emerging markets to broaden their customer base while enhancing BNPL capabilities. Other stakeholders in the BNPL market, such as established eCommerce (Shopee, Lazada, Traveloka) and ride-hailing companies (Grab, GoJek) have transformed their businesses to offer value-added services, including BNPL solutions, and create new revenue streams. Ecommerce and mobile commerce (mCommerce) critically drive BNPL adoption and will continue to do so in the long run. The Frost & Sullivan study covers the BNPL market in key Southeast Asian countries: Indonesia, Cambodia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. The study bases the market overview on online and physical/in-store merchants, offering insights into key companies in the region and providing market forecast discussions and total transaction volume forecasts based on the market’s growth drivers and restraints. Author: Dewi Rengganis
More Information
No Index No
Podcast No
Author Dewi Rengganis
Industries Telecom
WIP Number PC75-01-00-00-00
Is Prebook No
GPS Codes 9523-D1,9702-C1,9705-C1,9657,9598,9A66-C1