Following the news that Singapore-based e-commerce company Lazada Group plans to introduce Buy Now Pay Later (BNPL) service in Malaysia;

Pinky Hiranandani, Principal Analyst in the Thematic Intelligence team at GlobalData, a leading data and analytics company, offers her view:

“Alibaba-owned Lazada is said to be soon joining the BNPL trend in Malaysia, according to Tech Wire Asia. The company is following other e-commerce platforms like Shopee, which have already integrated BNPL on their platforms in 2021. Lazada is likely to see an increase in transactions with BNPL as it will ease access to interest-free loans on its platform.

“According to GlobalData’s Ecommerce Analytics, the BNPL market value in Malaysia is expected to almost double from $272 million in 2021 to $481 million in 2022 and subsequently reach $1.5 billion in 2026. Given the rising inflation and weak economic conditions, the launch of BNPL service is expected to gain traction as it will help customers afford expensive items and to better manage their finances.

“GlobalData’s BNPL Analytics 2022 reveals that BNPL’s share in the e-commerce spending in Malaysia is set to increase from 0.5% in 2019 to 9.0% in 2026. This shift to digital payments post-pandemic is likely to benefit Lazada’s BNPL service.

“Lazada’s closest competitor, Shopee, charges a monthly processing fee of 1.5% of the total payment amount for its ‘SPayLater’ and offers a broad selection of merchants but in limited categories. A broad merchant selection across various categories as well as zero processing fees are likely to appeal the customers looking to use BNPL service.”