Klarna reported global merchandise volume (GMV) of $18.9 billion in Q1 2021, up from $9.9 billion in Q1 2020, and $6.9 billion of this volume came in March 2021—a monthly record for the company. This jump in volume was supported by significant momentum in the US market: The number of US Klarna users more than doubled year over year (YoY) to reach 17 million consumers in April 2021.
The buy now, pay later (BNPL) company is making moves to continue this growth in the next quarter:
Klarna’s super app capabilities are putting it in a good position to build a loyal customer base and gain market share—but recent concerns may cause trouble for the BNPL firm. Klarna has been expanding its offerings beyond BNPL, including by diving into banking, and Klarna’s loyalty program, Vibe, is also building steam––the US added almost half a million loyalty members in Q1. Klarna’s super app ambitions can make it a hub for shopping and financial services, tying customers more tightly to the company, and Vibe’s growth can further solidify its customer loyalty. But despite Klarna’s positioning, it still faces hurdles: Last month, Klarna had to shut down its app temporarily after a bug logged some users into other people’s accounts and compromised consumers’ personal data. Klarna is also facing potential stricter regulations in the UK—like requiring affordability checks before lending to consumers—which could dampen its expansion plans if replicated in other countries.