Of course, a big part of Sezzle's success can be attributed to...

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tiramisutiger

223 Posts.

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01/05/21

21:42

Post #: 52872186
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Originally posted by StefanF: ↑

I agree with the view that SZL may overtake Z1P in the long run but I disagree how you came to the conclusion.

You talk about first mover advantage and market dominance but you are using #of merchants as the metric that you are judging this by. Since SZL targets boutique merchants, the # isn't really comparable since SZL will always have more.

I wholeheartedly agree with your statement "Gain a controlling share of the market before any competitors can emerge, as a result consumers will be less likely to switch as they already have the default option." But TTV is a far more suitable metric than # of merchants since TTV is a direct reflection of how much a BNPL is used.

Taking this into consideration I think your whole thesis is flawed.

Why do I think SZL will outperform Z1P? Personally I place a lot of value in brand, service, customer feedback and hence customer loyalty. SZL has a great branding (love the colours), great app and service but more importantly it appears to be great at building meaningful relationships with customers, similar to Afterpay (judging by social media interaction). This isn't something I have seen with Quadpay and in the medium to long term could play in SZL's hands. The key is to make customers "sticky" and staying loyal in an increasingly competitive landscape.

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Of course, a big part of Sezzle's success can be attributed to brand loyalty and the quality of their service. But I believe the first-mover status is critical as well to Sezzle's future success. Perhaps it is a combination of all those features that will strengthen Sezzle's position in the future over Z1P.

We can see that they are have recently announced they are entering Brazil, the first BNPL player to do so. They understand the importance of getting there first and establishing a controlling market share before others. Sezzle has been playing this perfectly.

Part of the reason why SZL has less controversies with dilution and selling, is also because the CEO holds a significant portion of the company (45%). Just like how Zuckerberg owns 29% of Facebook, and Musk owns 20% of Tesla. The founders have no intention of selling stock and are minimizing CRs by taking on debt facilities instead, because they are fully invested in the game. This is what invites investor confidence, and how we know they are acting in our best interests.

SZL Price at posting: $9.63 Sentiment: Buy Disclosure: Held
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1 Great analysis

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