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Laybuy (ASX:LBY) share price on watch as sales soar

The Laybuy Holdings Ltd (ASX: LBY) share price will be on watch today after unveiling another update of large growth.

Laybuy is a buy now, pay later business that operates in New Zealand, Australia, the UK and the USA. Consumers pay off the owed amount over six weekly payments, interest free.

Laybuy’s December quarter update

The buy now, pay later operator reported that its gross merchandise value (GMV) achieved a record of NZ$182 million – that represents an increase of 184% year on year and 44% quarter on quarter. That means that the annualised GMV has reached NZ$730 million.

GMV records were set in all markets, with November setting a new GMV record of NZ$71 million, up 220% year on year. December GMV was NZ$67 million, up 168%.

Online sales remain strong in December during the UK COVID-19 restrictions, while in-store sales contributed in Australia and New Zealand.

Active customers reached 687,000 , rising by 119,000 over the quarter. Year on year growth was 117%, an increase of 371,000 people.

Active merchants now number over 8,000, an increase of 1,684 over the quarter. This was a rise of 64% year on year, in actual number terms it rose by 3,126 merchants.

Laybuy UK saw 439% growth of active customers and 427% growth of active merchants.

Laybuy’s customer loyalty continued to improve as a share of repeat customers, it increased to 59% in the UK, up from 37% in the prior corresponding period.

Looking to the US launch, Laybuy US was beta launched in the quarter, with UK and ANZ merchants which ship to the US, making Laybuy US accessible to US customers as part of the soft launch.

Management comments

Laybuy Managing Director Gary Rohloff said: “Laybuy experienced a highly successful trading quarter with exceptional GMV growth across all existing regions. We delivered new records for the number of active customers and merchants, highest trading day, trading week and trading month driven by key initiatives (including the launch of “Tap to Pay” for in-store purchases in partnership with Mastercard) and record Black Friday and holiday sales.”

Summary thoughts

Laybuy is clearly growing quickly and it’s proving to be an attractive proposition to both customers and merchants.

I really don’t know how big Laybuy can become when it’s facing so much competition from players like Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P).

I don’t know how many BNPL players can be successful and profitable in the future. Perhaps only a few global players will thrive? Will Laybuy be one of them?

There’s a good chance Laybuy will keep rising in the shorter term, but I prefer to invest with the long term in mind. That’s why I’d prefer to invest in other payment ASX growth shares like Pushpay Holdings Ltd (ASX: PPH).

Is BNPL the opportunity of a lifetime or is the sector a ticking time bomb?

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Afterpay, Zip Co, Sezzle…

Is BNPL the opportunity of a lifetime or is the sector a ticking time bomb?

Rask's analyst has just finished a 7,500-word report, The Ultimate BNPL Sector Report, taking a deep dive into this booming ASX sector. It shines a spotlight on each of the major players. You can get the full analyst report for FREE by CLICKING HERE NOW.

Note: the report is 100% free.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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