Industry Spotlight: Buy Now, Pay Later (BNPL)
Weekly updates on the innovation economy.
Today’s newsletter discusses the Buy Now, Pay Later (BNPL) industry. Specifically, we highlight these 6 BNPL topics:
American E-Commerce Retail Sales
Introduction to BNPL
Four Main Distribution Models for BNPL
Leading Factors and Focus Areas for BNPL
Risk Factors
Supporting Industry Research and Data on BNPL
American E-Commerce Retail Sales
As displayed in the chart below, American e-commerce retail sales increased from less than $10 billion in Q1 2001 to greater than $200 billion in Q1 2021. Of course, the coronavirus crisis accelerated e-commerce adoption, and nonetheless, it’s likely for the large e-commerce tailwind and rising long-term trend to continue over time. Additionally, payment methods and technologies have evolved with the growth in e-commerce, and the “buy now, pay later” trend is an example of this.
Additionally, the share of consumer spending via e-commerce has historically increased over a long time horizon, as shown by the chart below:
E-commerce market share as a percentage of total retail sales is nearly 13% and has enjoyed multi-decade growth. Significant growth prospects exist in this under-penetrated market. When both retail sales and the market share of e-commerce increase over time, e-commerce “wins” twice.
Introduction to Buy Now, Pay Later (BNPL)
There are several big trends in e-commerce and payments, and today’s newsletter focuses on “buy now, pay later” (BNPL). The following 5 summary highlights help to define and introduce BNPL: