The Cettire Ltd (ASX: CTT) share price is soaring after announcing a partnership with Klarna. The stock is up more than 9%.
Why the Cettire share price is jumping
Luxury goods e-commerce business Cettire has announced an international partnership with Klarna, which is one of the world’s biggest buy now, pay later providers alongside Afterpay Ltd (ASX: APT).
Cettire customers, that are shopping in the US and Australia, will soon be able to use Klarna products on Cettire’s platform, providing greater flexibility.
If you’re not sure what Klarna does, Cettire explained that it’s a “leading global payments and shopping service, providing smarter and more flexible shopping and purchase experiences to 90 million consumers across more than 200,000 merchants in 17 countries.
What’s the rationale behind the partnership?
Working with BNPL is an interesting choice because the payment provider takes a sizeable cut for providing the customer with the delayed payment offering.
Cettire founder and CEO Dean Mintz explained: “Consumers expect convenient and flexible shopping online. Klarna is uniquely placed to meet the continued demand that Cettire is experiencing online across multiple geographies.
“Klarna will continue to enhance Cettire’s value proposition and further improve our customer experience through added convenience, flexibility and control. Further, by directly accessing Klarna’s large and expanding consumer network of 17 million shoppers in the US and 0.8 million shoppers in Australia, we look forward to introducing Cettire to a new audience of passionate luxury consumers.”
Summary thoughts on Cettire
Cettire is a very interesting business. It’s tapping into the high-growth, e-commerce trend and there’s also that bonus of luxury personal goods brands.
It’s seeing enormous revenue growth right now and the business is doing so well it’s expecting to generate a positive statutory EBITDA (EBITDA explained) in FY21. If Cettire can keep growing rapidly then it could be a really good business to own for the long term.
However, I’d like to see more evidence of margin improvement in the FY21 result. Even so, I think it’s one of the ASX growth shares worth watching.
