International Buy Now, Pay Later Report: More than Half of US & Southeast Asian Consumers Jumped into BNPL During Pandemic

JAKARTA, Indonesia, July 13, 2021 /PRNewswire/ -- According to new market research from Kredivo, the adoption of buy now, pay later (BNPL) services - and the value of those transitions - grew dramatically during the course of the last year as the global pandemic moved more shoppers online. Partnering with Katadata Insight Center, Kredivo analyzed data across millions of transactions across their leading digital credit platform in Southeast Asia to quantify e-commerce growth in Indonesia, one of the fastest-growing digital economies in Southeast Asia. The company also surveyed 1500 American consumers to provide an international lens and added insights around the meteoric rise of BNPL globally.

Buy now, pay later, and e-commerce trends: Indonesia

Using primary data from 10 million sample transactions made at Indonesia's six largest e-commerce platforms in 2020 as well as online surveys, the report is believed to provide a detailed picture of Indonesia's e-commerce industry. The report showed that:

• Spike in e-commerce over 2019: In 2020, the average value of e-commerce transactions has increased in almost all product categories compared to 2019.
• Rising usage and first time users: BNPL users have also increased during the pandemic; 55% of them used BNPL for the first time during the pandemic.
• Convenience, security, speed: BNPL has the potential to become the preferred payment option due to its convenience, security, and speed. Almost 90% of consumers are aware of BNPL. Of those who have used BNPL, 50% say they plan to use it more frequently in the future.
• BNPL used for cash flow: Other than to buy their urgent needs or to shop with a short installment period, 41% of consumers used BNPL to manage their cash flow (monthly expenses) - also significant increase in product categories such as household appliances, phone credit reloads and vouchers, as well as food.
• Rising consumer confidence in digital transactions: There has been an increase in the average transaction value consistently in almost all product categories due to consumers shifting to online shopping.
• Not just for GenZ and Millennials: Generation X (ages 36-45) experienced an increase in the number of transactions from 13% in 2019 to 19% in 2020.

Kredivo's VP of Marketing & Communications, Indina Andamari said, "The pandemic has dramatically changed our behaviors, including when transacting digitally. The research conducted by Kredivo with the Katadata Insight Center this year reinforces our projection that e-commerce adoption will continue to increase every year. Besides increasing public trust in e-commerce, the pandemic has also encouraged people to switch to digital transactions."

General Chairperson of the Indonesian E-Commerce Association (idEA), Bima Laga, said, "The pandemic has brought many changes in people's daily lives. It is important to be able to understand the online consumer trends and behavior, not only for e-commerce industry players but also for digital service providers that support the e-commerce ecosystem such as the fintech industry."

Buy now, pay later, and e-commerce trends: United States

While Kredivo operates only in Southeast Asia, the company's role as the leader in BNPL in the world's 4th most populous country provided an opportunity to compare trends in Indonesia against those in the United States. According to a survey of 1500 American consumers:

• Pandemic driven adoption: Of those who have made purchases using BNPL, 81% did so for the first time in the last year.
• Afterpay leading, followed by PayPal Pay in 4: 28% of respondents say they've used Afterpay, while 23% and 20% use PayPal and Affirm, respectively.
• Credit is "Too Expensive": When asked why they choose BNPL, the large majority of American consumers report that credit is too expensive, with "I don't trust credit card companies" trailing shortly behind.
• Monthly payments under $250: 84% of respondents say they pay $250 or less to BNPL services each month, with ¼ of respondents saying they pay $100-$250 each month.
• One-in-four late payments: 27% of respondents report that they are "somewhat" or "very" likely to make a late payment on BNPL in the next 12 months.
• Credit debt outstrips BNPL: More than 35% of respondents have an outstanding credit balance over $500, but only 11% say the same of BNPL
• Waiting for Amazon, Apple: 57% of shoppers said they'd be interested in using a BNPL solution launched by Amazon, while 24% said the same of Apple.

Kredivo's VP of Marketing & Communications, Indina Andamari continued, "Our research in both Indonesia and the United States  shows that the pandemic has also had an impact on accelerating the use of BNPL allowing it to become the fast, easy, and secure payment method of choice in e-commerce."

Katadata research randomly sampled primary data from Kredivo users across 34 provinces and from five age and income groups. The research, which was conducted in the first quarter of 2021, also analyzed the profile and types of consumers who shop online from various aspects, including gender, age, and location, to explore further the types of products purchased by consumers. Meanwhile, consumer payment behavior was specifically analyzed using data obtained from an online survey taking place between 26-30 March 2021 with 3,560 respondents throughout Indonesia. The American survey was conducted in May 2021, across 1500 consumers via SurveyMonkey. The full 2021 Indonesia E-Commerce Consumer Behavior research can be downloaded from www.finaccel.co.

About Kredivo
Kredivo is the leading digital credit platform in Indonesia that gives customers instant credit financing for e-commerce and offline purchases, and personal loans, based on real-time decisioning. Kredivo users can buy now and pay later with one of the lowest interest rates amongst digital credit providers in the country. Kredivo's merchant partners benefit from instant point-of-sale financing, powered by its unique 2-click checkout. Kredivo is operated by FinAccel, a Singapore headquartered financial technology company backed by leading investors such as Mirae Asset, Naver, Square Peg Capital, MDI Ventures and Jungle Ventures, among others. Kredivo is supervised by OJK's multifinance division in Indonesia. To know more about FinAccel and Kredivo, visit www.finaccel.co and www.kredivo.com.

Contact:
Emily Morris
630-346-4936
[email protected]

SOURCE Kredivo