As one of the earliest local companies to begin offering BNPL services here, Stuart Thornton, CEO and co-founder of Hoolah, considers his start-up an incumbent in the space.

Founded in February 2018, the platform lets consumers pay for purchases from nearly 2,800 participating merchants across Singapore, Malaysia and Hong Kong, over three interest-free monthly instalments.

Participating brands include department store chain BHG, women’s fashion store 6IXTY8IGHT, furniture retailers Hipvan and Castlery, audio equipment manufacturer Sennheiser, and kitchen appliance manufacturers Kenwood and De’Longhi Coffee.

“I think that we’ve also created a really good position for ourselves in this market where our brand equity is very strong,” says Thorton, 45, in an interview with The Edge Singapore.

The Briton moved to Singapore 13 years ago, bringing with him prior experience in the telecom and payment sectors. From 2014 to 2018, Thornton served as vice-president of business development at payment processing company WorldPay, where he began hearing merchants’ worries in running their business. “They would often come and say, ‘Listen; you’re a payments company. Can you come and help us to increase our sales, increase our conversion?’”

<hr/>See: <a href="https://www.theedgesingapore.com/issues/fintech/buy-now-pay-later-services">Buy now, regulate later? Are 'buy now, pay later' services good for cash-strapped consumers?</a><hr/>

Thornton first took notice of the BNPL concept spreading across Europe and Australia, owing to the success of Klarna and Afterpay in those respective markets. He began thinking of how to adapt a similar platform for Asia, particularly to meet the needs of young people in the region.

“In Singapore, younger consumers are using debit cards rather than credit cards, [traditionally] the primary shopping payment vehicle,” says Thornton. “Consumers are getting savvier with social media, they see these things that they would like, that they want to buy now, but perhaps they haven’t got the ability to at that time.”

“By offering this ‘pay later’ capability, we’re improving that marginal utility but making sure that they’re not getting into a debt position and focusing on responsible affordability,” he claims.

As of March, Hoolah’s total transaction volumes have grown over 1,500% since the start of the year, with topline sales growing over 800%.

Hoolah says its partner merchants have reported between a 20% and 40% increase in conversion and basket size on average. In return, merchants pay a transaction fee for every purchase made through Hoolah, though Thornton declined to reveal this figure.

See also: <a href="https://www.theedgesingapore.com/issues/fintech/rely-moving-up-retail-value-chain">How Rely is moving up the retail value chain</a>

“Imagine you’re a marketer and you spend an amount of money to get 100 people coming to you daily [and] you’re seeing two or three checkouts. If you double your spend in marketing and get six customers, you’ve now got 200 people coming but you’re still only seeing the same percentage of conversion,” he says.

“Rather than spend more money on marketing, what Hoolah does is give you that ability to increase the number of converted customers within that existing 100,” Thornton adds.

However, are there concerns over payment defaults? Hoolah pays its partner merchants upfront for all purchases, taking on the full risk of each purchase, says Thornton. A risk assessment platform also grants consumers spending limits calculated from several factors, including behaviour, items purchased and the relationship between these data points.

“If we went to market without anything like this, we would be in a very, very difficult position. It was a complex business and infrastructure that had to be built. You’re effectively assessing a consumer in real-time,” says Thornton.

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In January 2020, Hoolah raised an eight-figure Series A round, led by investment firm Allectus Capital, an early investor in Afterpay, before its public offering. The impact of this is not lost on Thornton. “If that’s what they see from us and our team, that’s a wonderful recognition.”

Owing to its rapid growth, the company is already raising funds for their Series B round. While the company started with just 30 staff at the start of the year, Hoolah currently employs more than 100 ‘hoolahgans’, with a majority of their employees based in Singapore.

Looking ahead, Hoolah will be launching in Thailand in 1Q2021 and the Philippines in the next quarter; as well as South Korea, Taiwan, Japan, Indonesia and Vietnam to follow. “One of the first things we had to do at the beginning was not to look at it as just a region,” says Thornton.

“You go 30 minutes north in a car and you get to Malaysia; it’s a very different environment. Flying out south to Indonesia, it’s completely different again … Compliance is very different, the risk is very different, consumer behaviour and mentality are different; the way they see salaries, affordability, spending debt are all very different to these different markets.”

With all that said, Thornton does not consider Hoolah a FinTech company. “We’re really a marketing or retail technology company. We’re very much focused towards driving new customers, it’s driving customers to come back, we’re driving that conversion, we’re bettering outcomes that we’re delivering to the merchants.”

Hoolah reaches Asia's underbanked youth

SGX reports FY2022 earnings of $451.4 million, up 1%; maintains full year dividend payout at 32 cents

Hoolah reaches Asia's underbanked youth

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