Afterpay expands as online shopping surges

Afterpay expands as online shopping surges
A logo for the company Afterpay is seen in a store window in Sydney, Australia. (REUTERS/Stephen Coates/File Photo)
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Updated 28 August 2020

Afterpay expands as online shopping surges

Afterpay expands as online shopping surges

BENGALURU, India: Afterpay laid out plans on Thursday to expand its buy-now, pay-later service to at least four continents, capitalizing on the sector’s burgeoning popularity, as the Australian firm said its full-year loss more than halved.

An online shopping boom triggered by the pandemic has boosted growth in the BNPL sector and helped turn Afterpay into one of Australia’s 20 most valuable stocks, having soared more than 10-fold since March.

The quarter to June was Afterpay’s best for the amount of sales it processed, and underlying sales in fiscal 2020 doubled from last year to A$11.10 billion ($8.04 billion).

With nearly 10 million active customers and competition building, Afterpay set its sights on Asia with the acquisition of a Indonesia-focused but Singapore-based BNPL, EmpatKali.

“They have got an established, albeit very early stage position, in Indonesia,” chief executive Anthony Eisen told Reuters.

Indonesia has the world’s fourth-largest population and its booming digital economy is expected to top $130 billion by 2025.

Tencent-backed Afterpay also formally announced its launch into Canada and said earlier this week it would venture into mainland Europe, starting with Spain, France, Italy and possibly Portugal and Germany, facing up directly with Klarna on its home-turf as global competition intensifies.

“We are in the land grab phase of growth,” said Andrew Mitchell, a senior portfolio manager at Ophir Asset Management.

Afterpay, which offers small interest-free instalment loans to shoppers and makes money by charging merchants a commission, reported a loss of A$22.9 million for the year ended June 30.