Afterpay Touch’s [ASX: APT] share price has risen by over 9% since opening this morning.
Shares are currently trading at $7.44, up from $6.96 yesterday.
Afterpay is an online platform that allows retailers to offer their customers the ability to buy products on a ‘buy now, receive now, pay later’ basis, without the consumer having to apply for or enter into a traditional loan.
Why has Afterpay’s share price increased?
The increase in share price followed this morning’s update announcing its expansion into the US market.
The update revealed that Afterpay has partnered with Urban Outfitters, one of the largest lifestyle fashion retailers in the US, almost equivalent to the size of the entire Australian online fashion market.
The contract with Urban Outfitters is for a minimum of two years. During this time they will launch Afterpay across its portfolio of brand websites, including Anthropologie, Free People and Urban Outfitters.
Dave Hayne, Chief Digital Officer at Urban Outfitters, said:
‘We have been impressed with the positive impact Afterpay has brought to their Australian retail partners, and we hope to see a similar response with our US customers.’
Afterpay will commence in the US as an online only platform, with the intention to introduce in-store capability later on.’
What does the US market mean for Afterpay?
The US market has significant opportunity for Afterpay. Their online fashion market alone is worth US$60 billion, in comparison to Australia — US $3 billion.
Matrix Partners invested approximately $19.4 million in Afterpay in January 2018, with those funds set aside to invest in the US launch and market development strategy.
In order to effectively enter the US market, Afterpay has established a US based team with extensive skills across relevant fields. The team will leverage the infrastructure and processes already in place in Australia, while also having strong local experience and knowledge. This will allow Afterpay the best opportunity to grow quickly.
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