Swedish bank Klarna was pivotal in the birth of the booming Buy Now Pay Later (BNPL) category. But with competition in the sector heating up, its chief marketing officer is keen to ditch the BNPL association and show the company’s bigger ambitions to be a global retail bank and one-stop-shop for e-commerce.
Klarna has faced intense scrutiny since it launched its BNPL offering. Much of chief marketer David Sandstrom’s role at Klarna is myth-busting criticisms lauded at the brand. “The first myth that irritates me is that we are just Buy Now Pay Later – we do so much more than that,” he says. Sandstrom references products such as its recently-launched credit card, automated checkout and app functions geared to make mobile shopping easier to navigate.
Klarna’s utopia is a completely seamless ecommerce customer experience, and Sandstrom wants it to be part of the process at every touchpoint.
“We built the company on making the e-commerce market work better, and every single strategy and service is part of that,” he explains. “Our consumer research shows that online shopping is incredibly lonely. There is no peer-to-peer recognition, no quick advice or voting on an outfit – we want to build that.”
Klarna has set out its stall to be the company that can enable shoppable content to thrive. “This step into shoppable content is a way to make the market function better and we are extremely excited about that,” he says. Acknowledging the west is trailing behind Asia on its journey to embracing shoppable, Sandstrom believes with Klarna’s easy purchase functionality it can be the brand leading the acceleration of shoppable.
Long term, Sandstrom says he’s looking at developments in China for ‘super apps’ that combine inspiration with shopping, and managing payments and returns. “That to me is the future – the pure one-trick ponies won’t survive,” he says.
Klarna also wants to become the world’s first global retail bank. The company has been aggressive in its international expansion having entered 10 new markets in the past two years, bringing the total number of territories it operates in up to 16. But these rapid growth plans have left Klarna shouldering $470m in losses in Q4 2021, largely in credit defaults, which for now it is shrugging off as a by-product of building the brand.
“There are going to be two or three players that create an everyday spending retail bank that is globally accessible because retailers need it,” Sandstrom says. “We want to be one of those.”
Complexities around regulation and cultures when entering new markets have previously been a barrier to creating a global retail bank, says Sandstrom. Offering Germany as a recent example, Sandstrom notes the country is generally less trusting of digital banking, so it partnered with eBay to introduce its product. “The reason there is no global bank is that it’s freaking hard, like beyond hard,” he remarks.
As it expands, Klarna is welcoming regulation. To protect the reputation of BNPL Sandstrom expressed that it “needs the shady competition to be closed down.”