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Indonesia Buy Now Pay Later Business and Investment Opportunities

Indonesia Buy Now Pay Later Business and Investment Opportunities

According to PayNXT360, BNPL payments in the country are expected to grow by 68.4% on an annual basis to reach US$4,674.1 million in 2022. Medium to long term growth story of BNPL industry in Indones...

Indonesia Buy Now Pay Later Business and Investment Opportunities – 75+ KPIs on Buy Now Pay Later Trends by End-Use Sectors, Operational KPIs, Market Share, Retail Product Dynamics, and Consumer Demographics - Q3 2022 Update
Summary
According to PayNXT360, BNPL payments in the country are expected to grow by 68.4% on an annual basis to reach US$4,674.1 million in 2022.

Medium to long term growth story of BNPL industry in Indonesia remains strong. BNPL payment adoption is expected to grow steadily over the forecast period, recording a CAGR of 32.5% during 2022-2028. The BNPL Gross Merchandise Value in the country will increase from US$2,776.0 million in 2021 to reach US$25,338.3 million by 2028.

In Indonesia, buy now pay later (BNPL) has helped to plug a significant lending gap. As of 2021, the credit card penetration rate is still relatively low at 6%, with approximately 65% of the 275 million strong population remaining unbanked. Over the last few years, as Indonesians have moved increasingly online, digital payment methods such as BNPL have gained strong traction among consumers. 

The surge in BNPL usage is also assisted by the rising internet penetration rate, which stands at 68% in 2021. This is the highest across the Southeast Asian region and is expected to reach 79% by 2025. While the Indonesian government is expanding access to financial services, the majority of the consumers suffer from poor financial literacy. While poor financial literacy remains a problem, debt in the country remains under control, according to Financial Services Authority. 

Over the next three to four years, PayNXT360 expects the demand for BNPL services to remain strong among Indonesians. This means more growth potential for existing players while offering opportunities for new entrants in the segment from the short to medium-term perspective. 

Firms are targeting the B2B sector to gain market share in the flourishing Indonesian BNPL industry 

During the global pandemic outbreak, BNPL startups gained increasing traction among consumers, as the payment method gave them higher purchasing power and the convenience of splitting the purchase into several interest-free installments. With the B2C space becoming increasingly competitive, firms are now targeting the B2B sector to gain market share in the flourishing Indonesian BNPL sector and raise funding rounds to accelerate growth. For instance, 

• In July 2022, Fairbanc, which is based in Singapore but focused on Indonesia, announced that the firm had raised US$4.8 million in its pre-Series A funding round, which was led by Vertex Ventures.  The BNPL startup offers short-term credit to small businesses to purchase fast-moving consumer goods (FMCG).  

• The firm plans to use the funding round to expand in Indonesia while also exploring expansion in other Southeast Asian markets such as Vietnam and the Philippines. Moreover, the firm is also considering expansion into other verticals beyond FMCG, including within the B2B supply chain. 

• The firm has partnered with 13 consumer brands, including Unilever, Danone, and Coca-Cola. In less than 12 months of operation, the firm has onboarded 350,000 merchants in the country, of which 75,000 are purchasing inventory using the BNPL service. 

This shows the growing demand for B2B BNPL products in Indonesia and across the Southeast Asian market. Consequently, PayNXT360 expects more firms to target the B2B sector from the short to medium-term perspective. 

BNPL providers are strengthening their in-store network to capitalize on the projected growth in the credit market 

As countries in the Southeast Asian markets continues to recover from post-Covid-19 lockdowns, the credit market is projected to grow at an exponential rate. To capitalize on this projected growth, BNPL providers are strengthening their in-store network in Indonesia. For instance, 

• In July 2022, Akulaku, the Indonesian digital banking and finance platform, announced that the firm would expand its in-store merchant network aggressively over the next two years. Launched in 2022, the Akulaku PayLater offers BNPL services to consumers with little to no credit history through 4,000 merchants. However, over the next two years, the firm is planning to expand its online as well as in-store merchant network. 

• As of July 2022, the BNPL service offered by the firm is used by consumers in over 40,000 offline stores across Indonesia. According to the firm, Akulaku is targeting to onboard 10,000 online merchants and 100,000 offline stores over the next two years. Earlier in 2022, the firm also raised US$100 million in strategic investment to help accelerate its expansion across the Southeast Asian region. 

Over the next three to four years, PayNXT360 expects more BNPL providers to emphasize their in-store growth strategy, as offline retail is expected to drive the next growth phase for the sector globally. 

BNPL firms are launching open-loop payments products to drive adoption and transaction volume in Indonesia 

Globally, BNPL firms are entering into strategic partnerships with merchants to allow consumers to shop from their network of merchant partners. However, to further drive the adoption of their BNPL product and boost transaction volume, Indonesian BNPL firms are launching an open-loop payments product. For instance, 

• In April 2022, Kredivo, one of the leading BNPL players in Indonesia, announced the launch of its Infinite Card, a virtual BNPL card that allows users to pay on all e-commerce platforms. For launching the open-loop payments product, the firm entered into a strategic partnership with Mastercard and Bank Negara Indonesia. 

• Being powered by Mastercard, Indonesians can use the BNPL virtual card on all e-commerce platforms, wherever Mastercard is accepted. This makes Kredivo a credit-card-like product for the 5 million users using the BNPL service. Notably, the firm also launched a payment card in partnership with Bank Sahabat Sampoerna, a Flexi card, that allows users to make purchase at  millions of places around the country. 

As the competition in the space continues to intensify, PayNXT360 expects more firms to launch open-loop payments products to drive their adoption and transaction volumes in the short to medium term. . 
Scope
This report provides in-depth, data-centric analysis of Buy Now Pay Later industry in Indonesia. Below is a summary of key market segments:

Indonesia BNPL Market Size and Spending Pattern
• Gross Merchandise Value Trend Analysis 
• Average Value Per Transaction Trend Analysis 
• Transaction Volume Trend Analysis 

Indonesia Buy Now Pay Later Operational KPIs
• Buy Now Pay Later Revenues, 2019 – 2028
• Buy Now Pay Later Share by Revenue Segments
• Buy Now Pay Later Merchant Commission, 2019 – 2028
• Buy Now Pay Later Missed Payment Fee Revenue, 2019 – 2028
• Buy Now Pay Later Pay Now & Other Income, 2019 – 2028
• Buy Now Pay Later Accounts, 2019 – 2028
• Buy Now Pay Later Bad Debt, 2019 – 2028

Indonesia Buy Now Pay Later Market Share Analysis by Key Players (Akulaku, Kredivo, Atome, Splitit, GoJek Paylater)

Indonesia Buy Now Pay Later Spend Analysis by Channel: Market Size and Forecast
• Online Channel
• POS Channel

Indonesia Buy Now Pay Later in Retail Shopping: Market Size and Forecast
• Gross Merchandise Value Trend Analysis 
• Average Value Per Transaction Trend Analysis 
• Transaction Volume Trend Analysis 

Indonesia Buy Now Pay Later in Home Improvement: Market Size and Forecast
• Gross Merchandise Value Trend Analysis 
• Average Value Per Transaction Trend Analysis 
• Transaction Volume Trend Analysis

Indonesia Buy Now Pay Later in Leisure & Entertainment: Market Size and Forecast
• Gross Merchandise Value Trend Analysis 
• Average Value Per Transaction Trend Analysis 
• Transaction Volume Trend Analysis

Indonesia Buy Now Pay Later in Healthcare and Wellness: Market Size and Forecast
• Gross Merchandise Value Trend Analysis 
• Average Value Per Transaction Trend Analysis 
• Transaction Volume Trend Analysis

Indonesia Buy Now Pay Later in Other: Market Size and Forecast
• Gross Merchandise Value Trend Analysis 
• Average Value Per Transaction Trend Analysis 
• Transaction Volume Trend Analysis

Indonesia Buy Now Pay Later Analysis by Consumer Attitude and Behaviour
• Buy Now Pay Later Sales Uplift by Product Category
• Buy Now Pay Later Spend Share by Age Group
• Buy Now Pay Later Gross Merchandise Share by Income 
• Buy Now Pay Later Gross Merchandise Value Share by Gender
• Buy Now Pay Later Adoption Rationale Gross Merchandise Value Analysis
Reason to buy
• In-depth Understanding of Buy Now Pay Later Market Dynamics: Understand market opportunities and key trends along with forecast (2019-2028). Understand market dynamics through essential KPIs such as Gross Merchandise Value, Volume, and Average Value Per Transaction.

• Insights into Opportunity by end-use sectors – Get market dynamics by end-use sectors to assess emerging opportunity across various end-use sectors.

• Develop Market Specific Strategies: Identify growth segments and target specific opportunities to formulate BNPL strategy; assess market specific key trends, drivers, and risks in the BNPL industry.

• Get Insights into Consumer Attitude and Behaviour: Drawing from proprietary survey results, this report identifies and interprets key Buy Now Pay Later KPIs, including spend by age, gender, and income level.

• Market Share by Key Players
Table of Contents
 1. About this Report
1.1 Summary
1.2 Methodology
1.3 Disclaimer

2. Indonesia BNPL Market Size and Future Growth Dynamics
2.1 Consumer Behavior
2.2 Competitive Landscape and Growth Strategies
2.3 Market Share
2.4 Regulatory Trends

3. Indonesia Buy Now Pay Later Industry Attractiveness
3.1 Indonesia Buy Now Pay Later – Gross Merchandise Value Trend Analysis, 2019-2028
3.2 Indonesia Buy Now Pay Later – Average Value Per Transaction Trend Analysis, 2019-2028
3.3 Indonesia Buy Now Pay Later – Transaction Volume Trend Analysis, 2019-2028

4. Indonesia Buy Now Pay Later Operational KPIs
4.1 Buy Now Pay Later Revenues, 2019 – 2028
4.2 Buy Now Pay Later Share by Revenue Segments
4.3 Buy Now Pay Later Merchant Commission, 2019 – 2028
4.4 Buy Now Pay Later Missed Payment Fee Revenue, 2019 – 2028
4.5 Buy Now Pay Later Pay Now & Other Income, 2019 – 2028
4.6 Buy Now Pay Later Accounts, 2019 – 2028
4.7 Buy Now Pay Later Bad Debt, 2019 – 2028

5. Indonesia Buy Now Pay Later Spend Analysis by Channel
5.1 Buy Now Pay Later Market Share by Channel, 2019 – 2028
5.2 Buy Now Pay Later Online Channel Market Size and Forecast, 2019 – 2028
5.3 Buy Now Pay Later POS Channel Market Size and Forecast, 2019 – 2028

6. Indonesia Buy Now Pay Later Snapshot by End-Use Sector
6.1 Buy Now Pay Later Market Share by End-Use Sector – Emerging Avenues and Future Growth Prospects
6.2 Buy Now Pay Later Sales Uplift by End-Use Sector
6.3 Buy Now Pay Later Share by Retail Product Category

7. Indonesia Buy Now Pay Later in Retail Shopping: Market Size and Forecast, 2019 – 2028
7.1 Indonesia Buy Now Pay Later Retail Shopping – Gross Merchandise Value Trend Analysis, 2019-2028
7.2 Indonesia Buy Now Pay Later Retail Shopping – Average Value Per Transaction Trend Analysis, 2019-2028
7.3 Indonesia Buy Now Pay Later Retail Shopping – Transaction Volume Trend Analysis, 2019-2028

8. Indonesia Buy Now Pay Later in Home Improvement: Market Size and Forecast, 2019 – 2028
8.1 Indonesia Buy Now Pay Later Home Improvement – Gross Merchandise Value Trend Analysis, 2019-2028
8.2 Indonesia Buy Now Pay Later Home Improvement – Average Value Per Transaction Trend Analysis, 2019-2028
8.3 Indonesia Buy Now Pay Later Home Improvement – Transaction Volume Trend Analysis, 2019-2028

9. Indonesia Buy Now Pay Later in Leisure & Entertainment: Market Size and Forecast, 2019 – 2028
9.1 Indonesia Buy Now Pay Later Leisure & Entertainment – Gross Merchandise Value Trend Analysis, 2019-2028
9.2 Indonesia Buy Now Pay Later Leisure & Entertainment – Average Value Per Transaction Trend Analysis, 2019-2028
9.3 Indonesia Buy Now Pay Later Leisure & Entertainment – Transaction Volume Trend Analysis, 2019-2028

10. Indonesia Buy Now Pay Later in Healthcare and Wellness: Market Size and Forecast, 2019 – 2028
10.1 Indonesia Buy Now Pay Later Healthcare and Wellness – Gross Merchandise Value Trend Analysis, 2019-2028
10.2 Indonesia Buy Now Pay Later Healthcare and Wellness – Average Value Per Transaction Trend Analysis, 2019-2028
10.3 Indonesia Buy Now Pay Later Healthcare and Wellness – Transaction Volume Trend Analysis, 2019-2028

11. Indonesia Buy Now Pay Later in Other Segment: Market Size and Forecast, 2019 – 2028
11.1 Indonesia Buy Now Pay Later Other Segment – Gross Merchandise Value Trend Analysis, 2019-2028
11.2 Indonesia Buy Now Pay Later Other Segment – Average Value Per Transaction Trend Analysis, 2019-2028
11.3 Indonesia Buy Now Pay Later Other Segment – Transaction Volume Trend Analysis, 2019-2028

12. Indonesia Buy Now Pay Later Analysis by Consumer Attitude and Behaviour
12.1 Buy Now Pay Later Spend Share by Age Group
12.2 Buy Now Pay Later Gross Merchandise Share by Income
12.3 Buy Now Pay Later Gross Merchandise Value Share by Gender
12.4 Buy Now Pay Later Adoption Rationale

13. Further Reading
13.1 About PayNXT360
13.2 Related Research
List Of Table
Table 1: Indonesia Buy Now Pay Later – Gross Merchandise Value Trend Analysis (US$ Million), 2019-2028
Table 2: Indonesia Buy Now Pay Later – Average Value Per Transaction Trend Analysis (US$), 2019-2028
Table 3: Indonesia Buy Now Pay Later – Transaction Volume Trend Analysis (Thousand), 2019-2028
Table 4: Indonesia Buy Now Pay Later – Revenues (US$ Million), 2019-2028
Table 5: Indonesia Buy Now Pay Later – Merchant Commission (US$ Million), 2019-2028
Table 6: Indonesia Buy Now Pay Later – Missed Payment Fee Revenue (US$ Million), 2019-2028
Table 7: Indonesia Buy Now Pay Later Pay Now & Other Income (US$ Million), 2019-2028
Table 8: Indonesia Buy Now Pay Later – Accounts (Thousand), 2019-2028
Table 9: Indonesia Buy Now Pay Later – Bad Debt (US$ Million), 2019-2028
Table 10: Indonesia Buy Now Pay Later – Gross Merchandise Value by Online Channel (US$ Million), 2019-2028
Table 11: Indonesia Buy Now Pay Later – Gross Merchandise Value by POS Channel (US$ Million), 2019-2028
Table 12: Indonesia Buy Now Pay Later Retail Shopping – Gross Merchandise Value Trend Analysis (US$ Million), 2019-2028
Table 13: Indonesia Buy Now Pay Later Retail Shopping – Average Value Per Transaction Trend Analysis (US$), 2019-2028
Table 14: Indonesia Buy Now Pay Later Retail Shopping – Transaction Volume Trend Analysis (Thousand), 2019-2028
Table 15: Indonesia Buy Now Pay Later Home Improvement – Gross Merchandise Value Trend Analysis (US$ Million), 2019-2028
Table 16: Indonesia Buy Now Pay Later Home Improvement – Average Value Per Transaction Trend Analysis (US$), 2019-2028
Table 17: Indonesia Buy Now Pay Later Retail Shopping Home Improvement – Transaction Volume Trend Analysis (Thousand), 2019-2028
Table 18: Indonesia Buy Now Pay Later Leisure & Entertainment – Gross Merchandise Value Trend Analysis (US$ Million), 2019-2028
Table 19: Indonesia Buy Now Pay Later Leisure & Entertainment – Average Value Per Transaction Trend Analysis (US$), 2019-2028
Table 20: Indonesia Buy Now Pay Later Leisure & Entertainment – Transaction Volume Trend Analysis (Thousand), 2019-2028
Table 21: Indonesia Buy Now Pay Later Healthcare and Wellness – Gross Merchandise Value Trend Analysis (US$ Million), 2019-2028
Table 22: Indonesia Buy Now Pay Later Healthcare and Wellness – Average Value Per Transaction Trend Analysis (US$), 2019-2028
Table 23: Indonesia Buy Now Pay Later Healthcare and Wellness – Transaction Volume Trend Analysis (Thousand), 2019-2028
Table 24: Indonesia Buy Now Pay Later Other Segment – Gross Merchandise Value Trend Analysis (US$ Million), 2019-2028
Table 25: Indonesia Buy Now Pay Later Other Segment – Average Value Per Transaction Trend Analysis (US$), 2019-2028
Table 26: Indonesia Buy Now Pay Later Other Segment – Transaction Volume Trend Analysis (Thousand), 2019-2028
List of figures
Figure 1: PayNXT360’s Methodology Framework
Figure 2: Indonesia Buy Now Pay Later – GMV and Adoption Rationale
Figure 3: Indonesia Buy Now Pay Later – Share by Gender and Age Group
Figure 4: Indonesia Buy Now Pay Later – Market Share Analysis by Key Players (%)
Figure 5: Indonesia Buy Now Pay Later – Gross Merchandise Value Trend Analysis (US$ Million), 2019-2028
Figure 6: Indonesia Buy Now Pay Later – Average Value Per Transaction Trend Analysis (US$), 2019-2028
Figure 7: Indonesia Buy Now Pay Later – Transaction Volume Trend Analysis (Thousand), 2019-2028
Figure 8: Indonesia Buy Now Pay Later – Revenues (US$ Million), 2019-2028
Figure 9: Buy Now Pay Later Share by Revenue Segments
Figure 10: Indonesia Buy Now Pay Later – Merchant Commission (US$ Million), 2019-2028
Figure 11: Indonesia Buy Now Pay Later – Missed Payment Fee Revenue (US$ Million), 2019-2028
Figure 12: Indonesia Buy Now Pay Later Pay Now & Other Income (US$ Million), 2019-2028
Figure 13: Indonesia Buy Now Pay Later – Accounts (Thousand), 2019-2028
Figure 14: Indonesia Buy Now Pay Later – Bad Debt (US$ Million), 2019-2028
Figure 15: Indonesia Buy Now Pay Later – Gross Merchandise Value Market Share by Channel (%), 2019-2028
Figure 16: Indonesia Buy Now Pay Later – Gross Merchandise Value by Online Channel (US$ Million), 2019-2028
Figure 17: Indonesia Buy Now Pay Later – Gross Merchandise Value by POS Channel (US$ Million), 2019-2028
Figure 18: Indonesia Buy Now Pay Later – Market Share by End-Use Sector, 2021 Vs. 2028
Figure 19: Indonesia Buy Now Pay Later – Market Share by End-Use Segment, 2021
Figure 20: Indonesia Buy Now Pay Later – Market Share by Retail Product Category, 2021
Figure 21: Indonesia Buy Now Pay Later Retail Shopping – Gross Merchandise Value Trend Analysis (US$ Million), 2019-2028
Figure 22: Indonesia Buy Now Pay Later Retail Shopping – Average Value Per Transaction Trend Analysis (US$), 2019-2028
Figure 23: Indonesia Buy Now Pay Later Retail Shopping – Transaction Volume Trend Analysis (Thousand), 2019-2028
Figure 24: Indonesia Buy Now Pay Later Home Improvement – Gross Merchandise Value Trend Analysis (US$ Million), 2019-2028
Figure 25: Indonesia Buy Now Pay Later Home Improvement – Average Value Per Transaction Trend Analysis (US$), 2019-2028
Figure 26: Indonesia Buy Now Pay Later Home Improvement – Transaction Volume Trend Analysis (Thousand), 2019-2028
Figure 27: Indonesia Buy Now Pay Later Leisure & Entertainment – Gross Merchandise Value Trend Analysis (US$ Million), 2019-2028
Figure 28: Indonesia Buy Now Pay Later Leisure & Entertainment – Average Value Per Transaction Trend Analysis (US$), 2019-2028
Figure 29: Indonesia Buy Now Pay Later Leisure & Entertainment – Transaction Volume Trend Analysis (Thousand), 2019-2028
Figure 30: Indonesia Buy Now Pay Later Healthcare and Wellness – Gross Merchandise Value Trend Analysis (US$ Million), 2019-2028
Figure 31: Indonesia Buy Now Pay Later Healthcare and Wellness – Average Value Per Transaction Trend Analysis (US$), 2019-2028
Figure 32: Indonesia Buy Now Pay Later Healthcare and Wellness – Transaction Volume Trend Analysis (Thousand), 2019-2028
Figure 33: Indonesia Buy Now Pay Later Other Segment – Gross Merchandise Value Trend Analysis (US$ Million), 2019-2028
Figure 34: Indonesia Buy Now Pay Later Other Segment – Average Value Per Transaction Trend Analysis (US$), 2019-2028
Figure 35: Indonesia Buy Now Pay Later Other Segment – Transaction Volume Trend Analysis (Thousand), 2019-2028
Figure 36: Indonesia Buy Now Pay Later – Share by Age Group in Gross Merchandise Value Terms
Figure 37: Indonesia Buy Now Pay Later – Share by Income Group in Value Terms
Figure 38: Indonesia Buy Now Pay Later – Share by Gender in Value Terms
Figure 39: Buy Now Pay Later – Adoption Rationale Gross Merchandise Value Analysis
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