Swedish BNPL provider Klarna is now offering its search and comparison tool to users in the UK, Sweden, and Denmark. The tool, which launched last month in the U.S., allows customers to compare prices across retailers and filter for preferences such as product features and shipping.
Klarna acquired PriceRunner, a product discovery and comparison tool company, in April of this year. The company had primarily operated in Sweden, Denmark, Norway and the UK. The hope was that integrating PriceRunner’s shopping experience capabilities into Klarna’s ecosystem would allow them to compete with the likes of eCommerce leader Amazon and web search leader Google.
According to Sebastian Siemiatkowski, Cofounder and CEO, of Klarna: “You could spend the whole day comparing offers at conventional search engines or marketplaces, but you’ll always have doubts – have I really found the best product at the best price? Klarna’s new search and compare tool does the hard work for consumers and compares thousands of websites in real time to ensure they have all the information they need to make informed and confident purchase decisions.”
The move hopes to draw Klarna’s 16 million U.K. customers as well as its Nordic customer base into its app ecosystem. The product is supported by Klarna’s own research which reported that 63% of UK shoppers preferred a single shopping app to perform multiple actions related to shopping.
The move comes right before the holiday season as BNPL will likely be a popular card alternative this year as economic uncertainties and inflation tighten household budgets in the U.S., U.K. and Europe. We wrote recently about a report that found 95% of U.K. consumers were concerned about the ongoing cost-of-living crisis. Out of the 66% of consumers that used a financial product to supplement their income—27% turned to a BNPL solution.
BNPL seems like a great short-term solution for consumers to delay spending until after the holidays, but will consumers be able to repay the debt as pocketbooks are strained? We do know that TransUnion recently reported that in the third quarter of 2022, credit card delinquencies are on the rise primarily among the subprime segments, which happens to be a large base for BNPL borrowers.
Overview by Ben Danner, Research Analyst at Mercator Advisory Group.
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