Pedestrians along Orchard Road in Singapore. — Bloomberg
SINGAPORE: Merchants in Singapore offering “buy now, pay later” (BNPL) plans are seeing an increase in sales, boosted by providers’ promotions and marketing.
BNPL allows consumers to split their purchases into three or four equal interest-free monthly installments.
Cosmetic dental start-up Zenyum is among merchants that have seen an uptick in sales from its use of BNPL services.
Zenyum’s products, which include electric toothbrushes, electric water flossers and invisible braces, can cost up to S$5,490.
Customers can use BNPL, cash or credit cards to fund their purchases.
Bhavin Mehta, Zenyum’s managing director, said having the BNPL payment option has allowed the company to market its products according to how much they would cost customers monthly.
They can see their purchases in a few monthly bills, instead of the full amount upfront.
The use of BNPL has also driven up sales for desk furniture retailer Omnidesk.
Jason Tay, head of growth and strategy at Omnidesk, said the company recorded a 20% uplift in the average order value when the BNPL option was offered.
Industry observers noted that younger people form the majority of those taking up BNPL services, and businesses are taking note.
Assistant professor of finance John Kuong at business school Insead said that the BNPL mode of payment is popular among millennials – those aged 28 to 43 – and members of Gen Z, aged 12 to 27.
Zenyum’s sales manager Beatrice Lim said 40% of its customers who use BNPL are Gen Zs, and 30% are millennials.
Tay said the majority of Omnidesk’s customers, who use BNPL, are aged between 25 and 45.
Essec Business School’s associate professor of information systems Jan Ondrus said BNPL installment plans result in big-ticket items looking more affordable on a monthly basis. — The Straits Times/ANN
