Buy-Now-Pay-Later App For Malaysian E-Commerce Brands

Despite the surge in online shopping in our country, many merchants have seen 90% cart abandonment by visitors.

Salespeople also struggled to find lasting solutions that wouldn’t impact their bottom line too much.

That’s according to Stuart Thornton, CEO and co-founder of Singapore’s Buy-Now-Pay-Later (BNPL) app, hoolah.

Since its launch in Malaysia in 2019, the BNPL app has already signed up with major local fashion brands such as FashionValet, Bonia and Pestle & Mortar.

Are people even buying non-essentials right now?

Since the first MCO, many retailers have been forced to close. With the country’s recovery looking distant again, many more are expected to be the same this year.

Well-known department stores like the Singapore Robinsons have closed for good, and many local restaurant businesses have also shared the same fate.

However, the opposite is true for e-commerce. Malaysia’s online retail sales grew 28.9% in April 2020 as we were unable to shop in physical stores.

It was the right time for hoolah to expand into Malaysia as Stuart noticed strong retail demand from consumers. Still, they weren’t able to afford big-ticket items without splitting the payments.

“With a market of 32 million people and only 4 million with credit cards, there was a great opportunity to deliver a responsible solution to more deserving consumers to drive accessibility and personal cash flow,” did he declare.

And they do it by promoting their motto “Responsible Affordability”. This essentially encourages consumers to only buy what is in their power through the app’s predetermined credit limit.

Saving the retail business in the event of a pandemic

Since its partnership with FashionValet’s online platform in 2019, hoolah now represents around 15% of their orders. Their strong partnership even led hoolah to serve its sister brand DUCK.

Equipped with a BNPL payment option, FashionValet could reach a wider audience looking for such alternatives. Because hoolah pays their merchants up front and in full once a customer transaction is completed, brands won’t impact their cash flow.

hoolah also increased Focus Point sales from 15% to 50% per purchase. This was an average of RM187 per purchase before offering the BNPL option.

Stuart further explained that the platform is free for traders and customers. However, they monetize by taking a share of every successful trade.

An interest-free credit card

If you are not too familiar with how BNPL works, it basically works like a credit card but with 0% interest. For ease of understanding, let’s use this hoodie from Pestle & Mortar (P&M) which costs RM329 as an example.

When ordering, you will simply choose hoolah as the payment option. hoolah will first pay the full amount to P&M and divide the transaction into 3 installments for you.

This means that you will pay around 109.67 RM / month for 3 months to own this hoodie.

Just choose hoolah as the payment option at checkout.

While hoolah isn’t the only BNPL platform available locally, I would say they stand out for the popular brands they work with.

The other local BNPL startups are Split and Paylater which operate in a similar fashion.

Anyone Can Afford Quality Products

When I wrote about Split it was the first time I encountered this payment option and I was skeptical. The concept sounded too good to be true, and that’s probably a sentiment shared by other less tech-savvy Malaysians.

The Stuart team is well aware of the consumer misconception towards the BNPL industry.

“We want to enable customers to invest in quality products and lead the lifestyle they want or aspire to. At the same time, we want to make sure that they spend responsibly and don’t get into debt, ”he explained.

Some screenshots of the hoolah app that helps customers track their purchases / Image credit: hoolah

Hoolah installment payments are automated. Users receive reminders of their monthly payments through the app. They also have the option to refund items or make prepayments whenever they want.

Much like Split, if a customer is unable to pay back on time, the hoolah team will first try to figure out their reasons. Stuart said this was usually due to customers forgetting the payment date or some unexpected event like a layoff or health issue.

If the latter reasons are true, hoolah usually ends up waiving the charge after checking the customer’s issue.

“At the end of the day, we want to make sure that we always understand these events and are working closely with customers to get the payment done the right way,” Stuart said.

As the BNPL industry continues to grow locally, consumers and traders are increasingly aware that this can be a sustainable option.

Stuart believes BNPL is also something traders can choose to help them get back into business and get them on track for future growth.

He concluded from their trip so far: “Following our expansion into Malaysia last year, we have seen remarkable growth as a business and the awareness we have generated is now underway, which is a testament to of increasing consumer demand for BNPL services various verticals, not just limited to the fashion industry. “

  • You can read more about hoolah here.
  • You can read more about other Malaysian startups here.

Featured Image Credit: hoolah Malaysia

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Jothi Venkat

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