Klarna, the Swedish fintech company that was at the forefront of the “buy now, pay later” movement, is rolling out a significant expansion of its product offerings—and that could be yet another sign that BNPL is reaching its peak.
The company today announced a number of product innovations, branded under the Klarna Spotlight moniker, including a new search tool that allows users to compare prices across thousands of retailers with the ability to sort results by color, size, features, customer ratings, store availability, and shipping options.
Meanwhile, Klarna says its new Creator Platform, also announced today, aims to be “a one-stop shop for retailers and creators to work together to automate everything from initial outreach, to partnerships, to tracking sales, and commissions.”
The final major announcement from Klarna is a shoppable video stream. Now when users watch a video in the Klarna app—for example, an unboxing or a review video—they can shop for the item in question right from the video. This is arguably the coolest feature that Klarna announced; it’s being used by pop heavyweights like Lady Gaga via her Haus Labs cosmetics initiative.
While Klarna’s announcements today show a company that isn’t resting on its laurels, these moves could signal the company’s awareness that it can’t rely on BNPL to keep growing forever. The short-term financing option, which lets people buy everyday goods and services and pay for them over time, rose to prominence during the first years of the pandemic, but the payment option has been widely criticized, with some pointing out that it can be a debt trap for younger generations.
Then there are those who say the whole BNPL industry is not in boom times, but rather it’s a bubble waiting to pop. There may be something to that opinion, too. A recent online spending report from Adobe found that as the 2022 holiday season approaches, BNPL growth is slowing. As Adobe noted, “From January to September 2022, online revenue share from BNPL grew only 5% when compared to the same period in 2021. While the growth has been partly affected by the broader economic environment and a slowdown in consumer spending, BNPL is also contending with challenges in demonstrating value to mass consumers.”
As TechCrunch noted in July, Klarna’s valuation dropped from a peak of $45.6 billion in 2021 to just $6.7 billion this summer. How much will its new Klarna Spotlight initiative help to get that number up again? Only time will tell.
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