How do you stay ahead in a market where competition is heating up? For Klarna, it is by transforming into a shopping hub through the launch of its super app. The super app integrates shopping, payment management, and support for products, delivery, and returns.
Klarna's super app functionality
Customers can shop at any online store through an in-app browser, regardless of whether Klarna has a standing partnership with the seller. The app provides personalized shopping collections, as well as deals and price-drop notifications. Customers can also save products and make one-click payments.
It also offers improved spending visibility and budgeting tools, and shoppers can track deliveries for purchases made with or without Klarna and manage returns in the app.
Klarna said it would introduce other features to the app—including money-saving tools, live shopping events, and enhanced product data like reviews and price history.
How did we get here?
Klarna's super app plans have been in motion for some time now. This could be seen in the company's recent acquisitions. In July, the firm acquired retail tech startup HERO, which connects online shoppers with in-store retail associates. It also bought discount shopping platform Stocard, which stores customers' loyalty and rewards cards in one place and automatically applies any discounts at checkout.
Last week, Klarna acquired price comparison platform PriceRunner, which it could integrate into its super app.
Why is this important?
If you are familiar with super app, you would understand that Klarna's latest innovation allows customers to do everything without leaving their platform. So, what does this mean from a demand/supply-side perspective?
From the demand side, Klarna's super could see its user and revenue growth. This is because Klarna's "shop anywhere" integration—coupled with personalization, deals, and enhanced product support—lets Klarna control the entire shopping experience, helping keep customers tied to its ecosystem and increasing revenue potential.
From a supply-side perspective, while its latest innovation gives it an edge over its competitors (Square, Affirm), it has entered into a new arena - the shopping hub space. This means that firms like Amazon, eBay are now Klarna's competitors. The move also puts Klarna on par with PayPal, which expanded its reach in the BNPL space and introduced its own super app.
Competition in this space is heating up. Although Klarna is the first to launch a super app, players like Affirm and After pay have both signalled super app interests. We expect these players to put out their own super app too.
We also expect Klarna's new competitors (shopping hub space) to explore BNPL payments options.