Australian BNPL firm Zip has reconsidered its plans for international expansion after a 95% stock slump

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As reported by Bloomberg, Australian buy now, pay later (BNPL) provider Zip is currently working with “boutique advisory firms” to sell off parts of its business operations in India, the Philippines, Turkey, the Czech Republic, South Africa, Poland, Singapore, the U.K., Mexico and the Middle East.

The firm’s ambitions of global expansion had to be revised as Zip is struggling to attain positive cash flow. Its inability to reach profitability amid intense competition and a slowdown in online spending brought up a 95% stock decline.

Trying to get investors back on board, the BNPL company will concentrate on four main markets: Australia, where it is the biggest rival to Afterpay, New Zealand, the U.S., and Canada. Focus on the most prospective markets along with significant inflows from regional sales is supposed to boost the firm’s financial indicators.

Zip’s executives estimate that achieving profitability in emerging markets where BNPL products are still not too popular would take about three-four years. The company, however, might not have this time, if it loses investors’ trust and interest.

Zip has already employed several other strategies to cope with the challenging economic environment last year. First, it closed the Pocketbook money management app to focus on a core BNPL business. Later in 2022, Zip launched an offline BNPL offering – Zip Card – in an effort to?expand opportunities for brick-and-mortar retailers that don’t support contactless payments as well as customers who shop on platforms where Zip is not a checkout option.

However, these initiatives weren’t enough to reach profitability in a challenging market environment where contraction or consolidation among the BNPL providers is now typical.