Exporting Afterpay Service to Singapore: Situational Analysis and Implementation Plan

1.0 Exécutive Summary
The purpose of this report is to provide Afterpay Touch Group Ltd with necessary
analyses and implémentation plans in the exporting of the Afterpay service into
Singapore. This report focuses to do this through situational analysis, business objectives,
marketing strategy analysis, financial analysis and project implementation and control,
which will be explored throughout.
The situational analysis conducted has determined that Singapore is suitable market for
Afterpay to expand into as market research indicates similar consumer behaviour to that
of Australians, with high regard for brands, quality and high standards of living.
Singapore is also regarded as one of the richest populations in Asia and through
situational analysis, we are able to critically analyse Afterpay’s resources and current
capabilities and how best to utilise these in entering the Singaporean market.
Business objectives are integral in understanding the motivation behind projects and
provides the organisation with guidance in aligning project activities towards objectives.
Afterpay’s expansion into Singapore should support the organisation’s overarching goals
of organic expansion, long term profitable growth and to become a legitimate service
which Singaporeans will utilise in purchasing goods and services.
This report will also provide a strategic breakdown of how best to enter the Singaporean
market as Afterpay positions itself as a location-free professional service. Marketing mix
strategy will also discuss this alongside analysis within the financial, legal and structural
consequences of this entry model The financial analysis will also provide a broad
overview of the projected results, alongside expenses through the implementation of this
project.
The final section of this report entails an action plan for implementation of this proposed
project in exporting the Afterpay service to Singapore. This action plan details delegated
tasks and correlating responsibilities whilst highlight milestones before, during and after
this project. Whilst this report does provide insight into the exportation of the Afterpay
service within Singapore, it is imperative that Afterpay Touch Group Ltd. take into

considerations their performance of the recent exportation project of the Afterpay service
within the United States before executing this project proposal. Nonetheless, we believe
that Afterpay Touch Group Ltd. will be able to leverage existing business connections
through retailers utilising the service within Australia and the United States to execute a
successful exportation project within the Singapore region.
2.0 Introduction
The marketing plan will enable Afterpay Touch Group to effectively export their
Afterpay service successfully and establish a presence as an affordable payment option in
Singapore. The following section will provide for an analysis of the Afterpay service and
situational analysis of Singapore as an appropriate region to export into.
2.1 The Company
Afterpay was established in 2015 after founder- Nick Molnar, identified a generational
shift in payment behaviour by offering customers an alternative to credit. Since its
launch, afterpay has established itself as a successful “buy now, pay later” service in
Australia allowing customers to make purchases at the same price over four equal
instalments every fortnight. The afterpay touch group is an Australian financial
technology company which currently operates in Australia, New Zealand and recently
exported into the United States.
2.2 Definition of and Reason for the Export Opportunity
Afterpay has the opportunity to enter one of Asia’s richest nations, Singapore. Singapore
being one of the least corrupt and most business-friendly economies in the world as well
as their consumers enjoying a high quality of life presents a positive opportunity for
afterpay to expand as a location-free professional service. In relation to Afterpay’s origin
and success, it can foresee greater opportunities in Singapore as 80% of Singaporean
millennials shop online, as well as a 69% have done cross-border online shopping,
therefore retailers internationally can highly benefit with Afterpay’s entrance into the
Singaporean market.

Ultimately, the Afterpay Touch Group aims to achieve successful long-term profitable
growth in Singapore. This marketing proposal will justify reasons for the expansion.
3.0 Situational Analysis
3.1 Company Analysis
3.1.1 Company Culture, Product and Brand Image
Afterpay, prior to their merge with Touchcorp in June 2017, was a growing organisation
with headquarters in Melbourne. Upon their merge, and now known as Afterpay Touch
Group Ltd., the organisation is now sized at up to 500 employees with an office in
Sydney and headquarters still based in Melbourne (Afterpay Touch LinkedIn 2018). The
organisation is relatively flat and possesses a decentralised structure, endorsing
collaboration and team work to drive effective communication (Afterpay 2017).
Alongside this, the organisational culture at Afterpay Touch promotes ambition and
drive, striving to be the “#1 leading retail technology company and an employer of
choice” (LinkedIn 2018). Their hard work and ability to innovate at a fast pace is
reflected through their success as an organisation, able to export the Afterpay service into
New Zealand and more recently, the United States.
Afterpay Touch Group operate within two key areas and now provide two different
services. The Pay Later, also known as Afterpay allows shoppers to buy product on the
basis of interest free, fortnightly installments. The Pay Now, known as Touch combines
“retail, mobility and health services that society use everyday without even realising it”
(Afterpay Touch LinkedIn 2018). Both services have global reach, however, within this
report we will be exclusively exploring the Pay Later aspect of Afterpay Touch Group.
According to Afterpay Touch Group’s 2017 Financial Year highlights, the organisation
has over 7200 retailers utilising the service, including international and domestic brands.
The service also has 1,000,000 customers describing their “strong alignment with core

millennial demographic” to continually drive momentum (Afterpay Touch 2018).
Afterpay have exported their service to New Zealand and more recently the United
States, proving to be successful within both countries. The fintech industry constantly
grows and with the growth with e-commerce has allowed this to flourish. Afterpay’s
brand image aligns directly with the millennial age group and the spike in spending
habits, allowing products that may be out of budget when paying in one lump sum, seem
affordable through interest free, fortnightly installments. Major Australian and
international retailers, such as The Iconic, are key contributors to Afterpay’s success and
brand image. Retailers that sell fashion, homeware, pet goods, technological goods and
more recently, Jetstar (Finder 2018) currently utilise Afterpay. Currently within
Australia, Afterpay is seeking partnerships with medical organisations to provide more
affordable healthcare options and have successfully partnered with Primary Dental.
Afterpay’s business model charges retailers 30c plus a commission of 4%-6% per
transaction made via Afterpay. Furthermore, Afterpay also charges a late fee of $10 if a
customer is unable to make their fortnightly payment, or simply forgets to do so. Within
Afterpay’s FY18 Annual Report, the organisation reported revenue of $117,774,000 with
underlying merchant sales of $2,185,000 (refer to Appendix A).
3.1.2 Current Marketing Activities
Currently Afterpay endorses their services via social media platforms such as Instagram
and Facebook to engage with millennial aged consumers. The organisation also is
featured on retailers’ social media channels, which can be credited to their rapid growth
within FY17 to FY18. Moreover, Afterpay have an app which can be used in store,
alongside their original business model focusing on e-commerce. Their marketing
strategy over the last two years have focused heavily upon developing more in-store
partnerships, through partnering with Westfield and promoting the “Afteryay 20% off”
sales. Afterpay have also aligned their marketing activities with Westfield’s Fashion
Weekend that occurs within September, with the tag-line “Happily Ever Afterpay” to
allow customers to share their purchases via social media and celebrate these purchases.

This marketing strategy has proven successful and continues to strengthen Afterpay’s
brick-and-mortar presence.
3.2 Target Area Evaluation
Although Singapore is of eastern culture with a large Chinese and Malay population, the
region is influenced by western culture due to Singapore possessing a large population of
expats (Singapore Department of Statistics 2017). This is reflected through international
retailers operating in Singapore such as Topshop, H&M and Zara. Alongside this,
Singaporeans are quite loyal to familiar brand names, as well as being conscious of price,
quality and service when making purchasing decisions. Due to Singapore’s small land
space of 697 sq km, major shopping centres have found themselves located mostly along
Orchard Road and around key hotels such as the Marina Bay area (Singapore Guide
2017). Due to this, leading retailers may possess a number of stores within close
proximity of each other - for example, Zara possess 6 stores, with the furthest located
store in Changi Airport. The saturation of stores deters new brands from entering the
market and thus, 69% of online shopping by millennial Singaporeans have been derived
from cross border online stores.
Singaporean consumers, particularly those who are tech savvy and online shop are within
the millennial age bracket and reportedly 80% of millennials Singaporeans shop online.
Moreover, clothing and footwear made up 2.4% of total consumption expenditure, with
other sectors such as health (7.1%), recreation and culture (13.1%) and
furnishing/household equipment (5.3%) being major contributors to this statistic (Refer to
Appendix B). As Afterpay within Australia is working towards forming more
partnerships with healthcare and recreation organisations, Afterpay will be able to
leverage Singapore’s current and growing consumption within these sectors as well as
clothing and household equipment. Singapore also has a high GDP per capita, recorded at
USD $55235.51 in 2017 (Trading Economics 2018). To compliment this, Credit Suisse
have ranked Singapore as “the richest population in Asia” (Santander 2018) with higher
purchasing power per capita than most European countries.
3.3 Environment (PLESCT)

3.3.1 Political
Australia and Singapore have shared a strong and vibrant relationship since Singapore
became an independent nation in 1965 and Australia was the first country to recognise it.
In relation to the entrance of new services, in particular, Afterpay, in Singapore, it can be
recognised that both Australia and Singapore mutually recognise the importance of
innovation to create modern and dynamic societies. Singapore is a world leader in
building a supportive and flexible environment for emerging business and Australia has a
world class research system and outward looking creative businesses that are ready to
collaborate internationally. Together, they can produce a powerful platform for the
Afterpay Touch Group to expand and successfully establish itself in a new, highly
dynamic market.
In 2016, both Singapore and Australia signed an MOU on collaboration in innovation and
science - “Recognising the importance of innovation to create modern, agile and dynamic
economies which embrace change and confidence with optimism” (Dfat, 2018). This
formal, nonbinding agreement sets the standards for which Singapore has become an
accessible environment for modern businesses to establish themselves and enhance the
dynamic features of the country to reflect millennial needs.
Additionally, Singapore has been ranked the world’s 7thmost innovative country due to its
commitment to innovation (AustraliaUnlimited, 2018). This commitment can be
emphasised through their tax incentives for start-ups and SME’s as the government
provides a range of innovation funding programs. Thus, it can instil in the afterpay touch
group that innovation and new ideas are welcomed in the Singaporean market. In
response to this Singapore has released a “Landing Pad Program” aimed at providing
market-ready start-ups and scale-ups to take their business global by offering a:

“ninety-day residency in a co-working space to help grow their business with mentor
networks, businesses services and in market learnings from international experts, access
to curated community that supports Australian entrepreneurs who want to go global via
shared insights and collaboration opportunities and finally assistance post residency with
business advice to help them continue to grow their business.(AustraliaUnlimited,
2018).”
This will ultimately enable Afterpay to rapidly fine-tune their pitch, commercialise the
offering of their ‘buy now, pay later’ service, identify partners, customers and investors
and access global markets in one of the most well supported programs offered globally.
3.3.2 Legal
Singapore has minor trade barriers and proves to be one of the most liberal trading
regimes in the world. However, in order to remain functional and secure, standards and
producers play a vital role in facilitating the development and adoption of new
technologies within the country. The Info-communications Media Development
Authority (IMDA) regulates the ICT industry. It is the secretariat to the IT Standards
Committee (ITSC), appointed by the National Standards Council in Singapore.
There are over 11 technical committees and councils who work together to promote
national infocomm standards and participate in international infocomm standardisation
activities. Thus, Afterpay must ensure they establish their platform through following
procedures of the IMDA and ITSC.
3.3.3 Economic
Singapore’s relationship with Australia is based on the idea that “more open trade will
lead to economic prosperity and bring more transparency to the business framework”.
This has led to the Singapore-Australia Free Trade Agreement (SAFTA) a

comprehensive agreement that has strengthened the trade and investment links and
eliminated tariffs in Singapore.
Consumer spending in Singapore has dramatically increased over the last ten years – it
has increased to 37,426 SGD Million in the second quarter of 2018 as opposed to less
than 28,000 SGD Million in 2008. Consumers are therefore willing to spend money as
they are accessing a higher disposable income. This is a beneficial aspect to Afterpay as
generally consumers will utilise Afterpay when they are spending larger quantities of
money on items, which eases budgeting for millennials as they are able to split those
payments over fortnightly payments.
Additionally, the Singapore-Australia Free Trade Agreement (SAFTA) is a
comprehensive agreement which aims to strengthen the trade and investment links and
eliminate all of Singapore’s tariffs (DFAT, 2017).