Horizons Newsletter – week 32 // 2021
Horizons is a bi-monthly Dasym Research initiative to show you how the Dasym themes have been in the news. We publish the Horizons on our website and as an email newsletter. If you wish to receive the email, please contact Investor Relations.
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BNPL is starting to mature
Recently, news came out that Apple intends to enter the attractive ‘buy now, pay later’ (BNPL) market. Spurred by fintech companies such as Klarna, Affirm and Afterpay, using a credit card is no longer the easiest way to delay making a retail payment in full. In its basic form, BNPL allows consumers to pay their bills in four or six installments without high interest charges (provided they pay their installments in time). Retailers collaborate with BNPL providers and cover the cost of credit to entice shoppers to spend more. Especially younger consumers perceive BNPL as a preferable alternative that gives them more financial control, a trend further spurred by the pandemic. Meanwhile, Apple is not the only interested party; the success of BNPL is also drawing other players to the market. In 2020, PayPal launched ‘Pay in 4’ and in 2021, Australian Commonwealth Bank started its own BNPL service, while Square just announced it wants to acquire Afterpay. The entrance of dominant players with large ecosystems and customer bases indicates that the market is maturing and adoption may increase even further.
Broaden your horizon?
In this section we share content that may be of interest to you:
- In Horizons week 18, we discussed the potential of the live streaming e-commerce market. In this Money Talks Podcast by The Economist, former Walmart Ecommerce CEO Marc Lore expects conversational commerce to be the next big thing, due to a combination of efficiency and convenience.
- According to Dealroom and Sifted, startup investment and innovation in blockchain is undergoing a step change in Europe and around the world. The ecosystems that can successfully connect public and private realms, as well as digital and physical worlds, will be the first to capitalize on the freedoms, efficiency and transparency of a decentralized future.
- This Bloomberg article addresses a shift towards a “chokepoint economy”, which is an expanded version of Keynes’ belief that governments should smooth economic cycles through additional spending.
India’s rise as a digital superpower
In the first half of 2021, Indian start-ups raised a record amount of $7.2 billion. In addition, the country is closing the gap with China in terms of creating new unicorns. Significantly, in 2020, India erected barriers to block “opportunistic takeovers of Indian companies” by its neighbors, which especially affect Chinese organizations. As such, most foreign capital now comes from European and American investors, countries that see India as a geopolitical partner in the bid to contain China. Furthermore, large public investments in India’s digital infrastructure are driving an ‘Indian Stack’, based on India’s already strong position in the IT sector and rapid adoption of digital tools by younger generations. In addition to India’s relatively young and still growing population and high willingness to adopt digital tools, India has all the ingredients to become a digital superpower and trigger the next wave of digital innovation, companies and consumer practices.