Homechoice Fintech’s move is eventually paying off. Despite economic constraints limiting its retail client base, JSE-listed Homechoice International has generated strong results by pivoting from its traditional retail sector towards fintech through its Finchoice and PayJustNow solutions.
Homechoice Fintech Move is Paying Off
Operating profit increased by 28% year over year to R619 million, while group revenue for the year ended December 31, 2023, remained unchanged at R3.7 billion.
Weaver Fintech, the firm’s fintech division, which operates the Finchoice and PayJustNow companies, produced 92% of earnings before group expenses even though retail sales were down 24% on an annual basis.
The HomeChoice brand was founded in 1985 as a mail-order retail company that specialized in selling consumer electronics and household goods through its well-known seasonal catalogs.
With the introduction of Finchoice in 2009, the corporation made the shift to fintech. Customers can spread out the payment of purchases over three months using BuyNowPayLater, an interest-free digital financing solution.
Homechoice Ecosystem
Customers can “buy upwards,” paying only a third up front and receiving their purchases instantly. HomeChoice pays for the item when a consumer uses the service, deducting a service fee that is assessed to the merchant.
The company’s data-driven, digital-first approach is starting to pay off by creating opportunities for cross-selling goods to group customers, irrespective of the channel they initially used to join the Homechoice ecosystem.
By limiting the items that consumers are presented to only those that they need and can afford, data profiling helps to maintain high payback rates, which enhances the quality of the group’s debt.
Finchoice Company’s Decision to Tighten Lending Standards
Although Wibberley acknowledges that the Finchoice company’s 2023 decision to tighten lending standards helped manage credit risk in an era of strong inflation, the company did, in retrospect, “leave some opportunity behind” by being overly cautious at the time.
The group wants to drive sales in both retail and fintech businesses to gradually replace some of its credit income with more fee-based revenue, so Wibberley is hoping that projections of interest rate cuts later in the year are accurate.
Retail operations within the group rely less on digital touchpoints. Wibberley claims that call centers account for roughly 60% of Homechoice’s retail revenues. The remainder is divided across its national retail showrooms and its web platforms.
Adding Showrooms Into the Group’s Retail Strategy
Incorporating showrooms into the group’s retail strategy is a recent development, but according to Wibberley, they have increased sales by providing a tactile experience for customers who desire it and acting as a point of collection for those who require it.
Businesses like Finchoice and PayJustNow, which conduct 95% and 100% of their business online, respectively, are significantly more technologically oriented.
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