Amid The Lockdown, The US Society Is Increasingly Hobby In Online Shopping

JAKARTA - Surfing on online buying and selling sites is a routine activity of the community, especially in the midst of the COVID-19 pandemic situation, which makes most activities carried out from home. However, the economic uncertainty has made people less frantic in pouring out their money.

However, the short-term credit services offered by various fintech financing companies are an attraction for someone to continue shopping online. For example, Afterpay in the United States (US), which offers US $ 260 in installments for four interest-free installments.

Quoted from Reuters, Tuesday, July 7, Afterpay is an alternative credit company that offers small loans, mostly to online buyers. This service generates money for the company from charging merchants a commission of 4-6 percent.

Companies offering pay later or buy-now-pay-later have benefited from the switch to online shopping during the COVID-19 crisis in countries including the US. State subsidies to boost the economy have also increased retail sales.

Some investors now believe that consumers will avoid physical stores as COVID-19 cases increase again in several countries around the world. But this swelling number of customers in microfinance services can also increase bad credit.

As unemployment rises and government aid recedes, a business model like this will face its first real test in a recession.

"Many are still worried about the second wave of the virus and the government is still trying to increase demand," said Andrew Mitchell of Ophir Asset Management.

The rise of online shopping is driven by the current lockdown situation. Afterpay for example registered more than one million new active subscribers in the US between March and early May bringing its overall active subscriber base to 9 million.

Meanwhile, retailers who want their goods to sell are also easier to accept partnerships with companies such as Afterpay. Klarna, Europe's biggest fintech company, admitted since March inquiries from retailers who may want to partner with it jumped 20 percent.

With 7.9 million US customers, Klarna, from Sweden, has partnered with outdoor equipment manufacturer The North Face, Disney streaming service and cosmetics retailer Sephora.

"Much of the growth came from higher margin sectors such as fashion and fitness," said Puneet Dikshit, a McKinsey partner in New York.