Klarna Follows Shopify, But Can it Beat It?

Klarna, the buy shop now pay later company that's emerging as the new "standard", has rolled out a new in-app shopping browser to get buyers to the checkout step even faster.

This is a very smart move from a very smart company. The more Klarna controls the shopping flow, the more they can control demand, which in turn means the supply side is (or, will be) at their mercy. That's a pretty powerful position to be in. Given how fast the popularity of BNPL is rising, this move can set them up for long-term success.

But, this move reminds me of another smart company that did something very similar. Remember when Shopify rebranded its package tracked to Shop and added in-app shopping? Well, this is pretty much the same.

Shop's and Klarna's mobile apps are now in a head-to-head match, and both are competing for the same kind of engagement. They're battling Amazon and a slew of other apps, but I'm going to skip the 1st party experiences because both Klarna's and Shop's shopping is all about buying from stores they don't run.

In the U.S., where both are popular, downloads of the two are very close. Shop averages 40% more downloads on a weekly basis vs. Klarna. Our estimates show that in an average week, Shop adds 560,000 new users in the U.S. while Klarna adds 400,000.

The main difference between the two, as you can see in the chart, is that Klarna's downloads are growing while Shop's ebb and flow but are overall flat. Since the beginning of 2020, Klarna's weekly downloads doubled. Much of the growth was in 2020, but with the new shopping experience, I expect we'll see more growth in the coming months. Especially as we head into the holiday shopping season.