Lol true, I'm glad that IOU isn't a BNPL only.
BNPL is doing as well as in Malaysia as you'd expect from BNPL.
One of the biggest players (grab) has definitely not even made 1.5 million in net revenue.. I am sure you would be having conniptions if you held... (note, despite massive losses they're still worth 2.60USD).
I love this headline. Little bit less than 1.5 million though eh?
https://www.phocuswire.com/Grab-posts-loss-4-billion-2021-claims-strongest-year-yet>Its competitors now have huge cash war chest
They have high transaction value. Do they have profits though ? Hmm. You'd need to provide some counterpoints. So far IOU is making money on BNPL, not losing it.
An aside.
This article is interesting and in my opinion can help to explain why IOU may want IDSB
https://www.theasianbanker.com/updates-and-articles/bnpl-to-lose-$5.2-billion-in-asia-pacific-by-2025
The expectation is that BNPL will lose money but.. if they have access to IDSB's customer database... and can get money out of civil servants directly.. think of the position this puts them in relative to their competitors. Doesn't matter how many transactions you make if 5% bad debt can wipe you out.
The article is instructive in terms of the Malaysian governments perspective of BNPL as well as the general perspective in SEA.
These ones are interesting too, as far as Malaysian sentiment.
https://www.theedgemarkets.com/article/cover-story-buy-now-pay-later-or-nothttps://www.thestar.com.my/business/business-news/2022/05/21/bnpl---a-debt-bondageIOU offers its service easily only for small amounts. For larger amounts, they complete a more detailed assessment.
So while Kevin is right, the reason their competitors have a higher market share is *they take way more risk*. As evident by their stellar profitability.
Is IOU focusing on the lowest common denominator customer for their BNPL product? No, I don't think so. Management acknowledges the need for a quality customer base and credit controls. They've said themselves their target is high quality customers. That they are spending money and effort finding the high quality customers. Bad debts are currently reasonable. It's almost is if they've done their research on the space they're entering!
Watch Grabs share price over the next few months and then lets have further discussion on IOU's BNPL competitors destroying them.
(20min delay)