ZIP (ASX) Zip is the top 3 to sell today.

Originally posted by torrens197: ↑

stefan

You're a hug holder of apt
You've done your best to try create a level of uncertainty on the longevity of zip
You said there is real risk of business execution risk. You were cut to pieces when another user on here highlighted Afterpay is the only ASX listed bnpl that's had actual business execution risk come to fruition with the flatline growth in the US resulting in Bick urgently flying to the US to try fix the problem. Ie the risk was Afterpay wouldn't be able to maintain growth targets in the us. Fact they had a real problem with flatline growth. Remedy totally change the org chart and fly top guy to us to try fix it. Afterpays US strategy at a guess would be to be the fastest growing bnpl and first choice in the US, the world's biggest market. But based on Afterpays continuous surge Afterpay are still failing on their execution with Afterpayaking massive gains on Afterpay which really shouldn't be loosing ground to quadpay at all given they have a head start and huge amount of capital dollars to invest in its people. The 700 % increase in merchants says it all really. Afterpay is under fire in the US and so far they are not winning on quads relentless attack.

You then talked about margin erosion. You linked it to zip not being able to possible get more than 0.75% for any tap and zip. You ignored and said that's just a dumb model when it was brought to your attention Zip have a backend process where they collect the merchant fees each period, thereby maintaining high margin and giving convenience to the customers. You said it was just dumb. You're an idiot.

You said the integration would fail with quadpay. That Quadpay wouldn't grow. Well let's look at that. Quadpay is the fastest growing bnpl in the US.

Let's revisit margins. In the latest quarter Zip ANZ has been able to rocket up it's YoY growth back to above 60 percent while.maintaininf aargin higher than Sezzle or Afterpay. Afterpay has failed to disclosed its latest margin achieved saying it's similar to what was achieved in Fy2020, I read that it's dropped by ten percent to 4 %. Had it gone up Afterpay would disclose it to mkt. They have consistently not come forward with negative results on announcements focusing on positives.

unpackijg this conversation further we need to look at Quadpay. It's achieved a market leading 7.07% margin on TTV. US now has the majority of customers. And from what we've seen in the us, the average spend per customer increases over time. Quad is also continuing to get 500K plus customers a month; something you said couldn't be maintained past November 2020. You said the high app downloads were an anomoly due to the sales. Yet Zip was able to increase its month on month sales and result in the December month! With a 40 million revenue result annualising at 480 million a year and > 7.5 billion ttv.
With each passing month the % of revenue generation skews to the US quads business. So zip in Austtalua could hypothetically continue to decrease it's margin achieved in Auatralia through marketing activities it ran in December like the cash back and due to the rising numbers at Quadpay maintain a healthy margin of 6.5% globally

With Afterpays revenue now sitting at a likely 4% and zips at 6.5% zip is delivering 62 percent more revenue per TTV dollar sold than Afterpay.

the big issue with Afterpay are it's challenges with scrapping the barrel of customers. It's attracting a lot of customers onto its platform. But the issue is Afterpay are attracting people who don't want to pay anything on fees. Which is great for customer but it means Afterpay must rely on it's margin from merchants more and more! If more customers sign up to Afterpay who pay on time iteans the average revenue for Afterpay will continue to decline as historically up to 27 % of their revenues came from late fees. Last report that was down to between 13 and 14%.
Zip and quad seem to not have as many customers but are attracting what we can call say premium custometrs. Those that 1. Spend more. And 2 are willing to pay something for the use of Zips/quads flexibility to be able to buy anything anywhere.
Afterpay doesn't offer this feature; it signals to the market that it wants the scabs of the customer pool. And that's what it is attracting imho. AffeCtigely a race to the bottom.

It's an issue for Afterpay because if late fees increase its a bad sign to the market and regulators watch and comment as Noone likes late fees and we have already seen banks dragged over coals for late fees.
But account fees for having an account that gives you access to credit has never been an issue with regulators.

im very happy I'm in bed with Zip. I see zip like the Porsche Audi group. Higher quality more feature rich. More profitable.
Afterpay might be able to generate similar revenues as Zip in total but it needs a shit tin more customers. The market seems to not really care yet, a customer is a customer. But we know this isn't true. There are customers you want. And there are customers you don't want. Zip seems to at this stage be attracted the high tier more valuable customer to its platform and Afterpay is attractive the more tight arse low value customers.

klarna achieves just under 3 percent revenue per TTV dollar. And it's been profitable many quarters historically.
so Afterpay margins still look healthy given its scale and growth

But to use margin erosion as a bone of contention for Zip as they are in rapid growth mode and already achieving 62 percent greater revenues than Afterpay while offering feature like tap and zip makes you like like a real idiot that has really poor analysis skills.

Expand

Great post by the way, took the words right out of my mouth.

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