Why “Buy Now Pay Later” the Hottest Trend in E-commerce?

by Starry   ·  9 months ago   ·  
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At one point or another, you have probably found yourself not wanting to pay in full for a product you are purchasing. Maybe the product was quite expensive, or maybe you were shopping at the end of the month, whatever the reason, it is always great to get a little flexibility concerning the payment. You would not like to wait for another month to get your favourite sneaker shoes. Lazada is listening to this rising tide of buyers who expect payment flexibility and has responded according. And the results are impressive, to say the least.

Younger customers are making bold choices

When it comes to getting their hands on the in-trend sneaker shoes, Lazada is well aware that its customers are not a patient lot. Particularly young adults, who are increasingly shopping online, want to purchase things they want right now, instead of later, even if they don’t necessarily afford it at the moment. ‘Living in the moment’ has become more than a philosophy. Impulsive shopping is increasingly observed among younger consumers. However, these consumers are also quite averse to the idea of debt and therefore credit cards are not really the payment option they prefer. This is where alternative payment methods such as ‘Buy now Pay later’ enter the picture.

The appeal of ‘Buy now pay later’

The concept revolves around the idea that you can provide a certain preliminary amount for the product, and you will be able to pay the rest of the cost later on. Essentially, you would be paying partially. Different companies are following different terms and conditions with regard to this alternative payment method. However, one thing is common, you don’t have to wait to get your fresh pair of sneaker shoes. Lazada has been ahead of the curve in terms of integrating this approach seamlessly into their business model. Customers buying from Lazada can pay later for the products they buy, and they don’t even have to pay any interest, which is quite a sweet and irresistible deal. 

E-commerce platforms are getting on board

For e-commerce enterprises, there are several benefits of letting their customers pay over an extended period. They build a relationship of trust and reliance with their customers. Of course, consumers are going to Lazada to buy brand new sneaker shoes. Lazada, after all, is giving them the product without having to pay in full, instantly. Other industry players are also recognising this shift and offering instalment options to their customers.

Budget buyers are the target audience

While incorporating alternative payment methods such as ‘Buy Now Pay Later’, enterprises are eyeing the demographic of ‘Budget Buyers’. To put it simply, these are buyers who are looking for good quality products at a price that best fits into their budget. They cannot overspend on something just because they want to, as they are on a budget. This is why having the ability to make payments in instalments is such an advantage for them. But what’s interesting about budget buyers today is that they do not necessarily purchase ‘big items’ such as furniture or electronics on instalments. Increasingly, consumers are buying small products on instalments. This is a new trend and online platforms, in particular, have started noticing.

The continual growth of APM(Alternative payment methods)

Another crucial factor contributing to the explosive rise of ‘Buy Now Pay Later’ is the continued growth and adoption of APM by users around the globe. As per the assessment of McKinsey Panorama, payment services now make up to 35% of the total financial services revenues being generated globally. This figure rose by another 6% in 2018. As more and more landmass is being connected to the electrical grid, the percentage of e-commerce market share is considerably expanding in the retail sector. Given how digital payments by consumers touched the $3 trillion figure in 2017, it is safe to say, APM will continue to grow and expand its reach.

‘Buy Now Pay Later’ is here to stay

Both Chief Commercial Officer of Affirm Silvija Martincevic and Founder and CEO of The Business of Fashion Imran Amed reiterated in their address to the VOICES that Buy Now Pay Later models are among the prime strategies that would prove incremental in taking the fashion industry forward.

Takeaways

Take any of the major countries on the map. ‘Buy Now Pay Later’ has either already become the fastest growing online payment method or is well on its way to becoming one. This is the fastest growing online payment methodology in the US, but the same is true for Australia, Brazil, France, Japan, the Netherlands and the UK. If it’s still not the case in your country, don’t worry, it’s about to happen. Soon you will be able to buy your pick of sneaker shoes. Lazada is setting an example that many are swiftly following.

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