Since forming back in 2015, ‘buy now, pay later’ payments company Afterpay Holdings Ltd (ASX:AFY) has been a hit with customers and retailers alike with more than 356 thousands customers and more than 2000 retailers now using the company as at its half year 2017 results.
In fact, during a business update back in early April, the company disclosed that Afterpay now processes around 3% of all Australian online retail sales and 15% of all Australian online fashion retail sales as well as more retailers signing up to the popular platform. It also recently released its first iPhone app which debuted in the ‘top 15 free apps’ and even hit number one for a brief period. Indeed, it has been a big year for the company.
However, the news today that Afterpay has been selected as the exclusive ‘buy now, pay later’ option for popular New Zealand website Trade Me Group Ltd (ASX:TME) is the biggest as it marks the first time that Afterpay has entered a market outside of Australia.
Although the name Trade Me is unknown to many Aussies, it is a dominant business in New Zealand. Trade Me is New Zealand’s most visited ecommerce website with almost 1.8 million people visiting the website every month and more than NZD$422 million in sales activity in the six months to December 31.
Although there is still plenty of growth potential in Australia remaining (both online and in-store), the biggest opportunity comes from growing Internationally (along with entering other customer facing businesses such as services and travel).
If the Kiwis latch onto Afterpay like their Australian brothers and sisters have, then Trade Me is unlikely to be the only New Zealand business we see using the service before the year is out.
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Motley Fool contributor Andrew Legget owns shares of Afterpay Holdings Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.