What a week its been for the ASX’s six buy now, pay later stocks (BNPL). In the last seven days the average gain was 55 per cent, adding over $2bn in value.

Despite most sliding back today, the six stocks are collectively worth nearly $17.6bn, up from just over $15.2bn last Friday.

Leading the charge was Openpay (ASX:OPY) which more than doubled this week after announced a new funding facility and a capital raising.

Zip Co (ASX:Z1P) announced the acquisition of US-based Quadplay to help it enter that market.

Splitit (ASX:SPT) announced merchant sales volume growth of 321 per cent in May 2020 compared with May 2019.

While the other trio of stocks (Sezzle (ASX:SZL), Flexigroup (ASX:FXL) and industry behemoth Afterpay (ASX:APT)) did not have news this week, they too have ridden the wave of momentum in the sector.

Code Company Price 29 May Price 5 June (11am) % Gain Market Cap
APT Afterpay 47.41 51.22 8% $13.7B
Z1P Zip Co 3.75 5.71 52% $2.2B
OPY Openpay 1.29 3.11 141% $291.7M
FXL Flexigroup 1.13 1.37 21% $540.3M
SPT Splitit 0.465 0.78 68% $274.8M
SZL Sezzle 2.07 2.90 40% $520.5M

 

Chinese competition

Curiously many of these stocks retreated today. One possible catalyst is emerging competition from China.

Fellow ASX small cap AuMake (ASX:AU8), which operates daigou-focused stores, announced this morning its customers could use Chinese BNPL to pay.

Specifically, they could use Alipay’s Huabei and Tencent’s Fenfu credit features.

The former is already active and has over 190 million users and while the latter is in the final stages of development, its parent company boasts 1.1 billion customers.

Just like its ASX peers, a significant proportion of its users are younger people. For example Huabei’s under 35 demographic make up 93 per cent of its total customers.

“BNPL is revolutionising the way consumers shop globally, including in China, and AuMake is pleased to support this service for in store customers as well as its growing 40,000-online-customer database,” AuMake said this morning.

Despite Australia’s border closures, AuMake has kept selling to Chinese consumers online and thinks this move will help the company expand.

“BNPL will assist AuMake to penetrate a younger Asian customer demographic, including the Free Independent Travellers segment which is anticipated to grow post-COVID,” it said.

AuMake shares rose nearly 14 per cent this morning.