Key Takeaways

• Klarna's primary customer target is merchants. The company's go-to-market strategy is first to acquire merchants through some direct mechanism. The company's target merchant is in the segment where the order value is comparatively low because its key offering is split into 4 product.
• Afterpay has approximately 10 million active users globally. There are about 5.6 million Afterpay's customers in the United States, 3.3 million in Australia, and 1 million in the United Kingdom.
• Afterpay's competitive advantage relies on its global two-sided network linking consumers and retail merchants, allowing the development of a highly engaged customer base.  
• Affirm targets merchants in the category of higher-order value items. The most prominent merchant that Affirm is working with is Peleton.
• Affirm's BNPL offerings include simple-interest and interest-free installment options.

Introduction

Klarna

• Klarna's primary customer target is merchants. The company's go-to-market strategy is first to acquire merchants through some direct mechanism.
• The company's target merchant is in the segment where the order value is comparatively low because its key offering is the split into 4 product. Fashion is Klarna's big target market.
• Klarna focuses on payment experiences in its brand positioning. The company's brand tagline is "payment experiences shoppers love."
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• For the marketing channel, Klarna partners with large retailers with well-known brands exclusively to scale customer acquisition. Large players featuring in Klarna's collateral are Macy's, Lululemon, and Sephora.
• Klarna's differentiation strategy is placing the brand at the lead of its interactions and touchpoints with merchants, as well as end users.
• According to the New Global Order, Klarna's competitive advantage depends on its simple and smooth payment process that needs minimal customer details, making more regular and consistent purchases possible.
• Klarna's BNPL offerings include interest-free pay-in-four installment and pay-in-30 option. The company is also launching its own loyalty program to reward customers doing BNPL shopping using typical debit cards.

• For missed payments, the company charges a $7 late fee. However, Klarna does not report missed payments in the Pay in 4 and Pay in 30 offerings to the credit bureaus.
• The company's user base has grown to 90 million active consumers in over 250,000 merchants across 17 countries.
• In the United States, Klarna reached a record 11 million customers as of the end of 2020. The shopping app reached 2 million monthly active users and an average of 50,000 daily downloads.  

Afterpay

• Afterpay, like other BNPL players, has merchants as its primary customer target. The company's go-to-market strategy is first to acquire merchants through some direct mechanism.
• Afterpay has similarities with Klarna in that both companies' target merchant is in the segment where the order value is comparatively low because its key offering is the split into 4 product. Fashion is Afterpay's big target market.
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• For the marketing channel, Afterpay partners with large retailers with well-known brands exclusively to scale customer acquisition. Afterpay has the Gap and its sub-brands in its collateral.
• Afterpay is brandy with its positioning, and its brand tagline is "join the happily ever after."
• Afterpay's competitive advantage relies on its global two-sided network linking consumers and retail merchants, allowing the development of a highly engaged customer base.  
• The company's BNPL offerings are interest-free offerings. Afterpay charges its customers a late fee for missed payments after an initial grace period. The customers falling behind on payments are denied access to making future payments until their debt obligations are fully settled.
• Afterpay has approximately 10 million active users globally. There are about 5.6 million Afterpay's customers in the United States, 3.3 million in Australia, and 1 million in the United Kingdom.
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• The total mobile app downloads for Afterpay for July 2021 were 900k. During that month, there were 600k iOS app downloads and about 400k Android app downloads.
• According to Financial Review, Afterpay's marketing spending surged to $32 million as of February 2020.

Affirm

• Affirm targets merchants in the category of higher-order value items. The largest merchant that Affirm is working with is Peleton.
• Affirm has a natural advantage over its competitors because its product is structured like a loan with the availability of up to 36 months hence favorable for longer terms.
• The company has differentiated itself with high-value purchases. Its competitive advantages lie in its tech and risk management capabilities that allow it to "create a lot of value for merchants."
• For the marketing channel, BNPL players enter into exclusive partnerships with large retailers with well-known brands to scale customer acquisition. Large players featuring in Affirms collateral are the largest retailer in the United States, Walmart, and the hippest fitness brand Peleton.
• Affirm's value proposition and positioning are functional, in which they about their product being great for shoppers and business. The company's brand tagline is "more people buy with Affirm."
• Affirm's BNPL offerings include simple-interest and interest-free installment options.
• For missed payments, the company does not charge its customers late fees. The company locks down access to its network for customers who eventually fail to meet their obligations in smaller-value payments. Affirm reports customers who fail to make good on bigger-ticket items to a credit bureau.
• The company's number of active consumers was 5.4 million as of March 31, 2021, a 60% increase from March 31, 2020.
• Total mobile app downloads for Affirm for July 2021 were 300k, comprising around 200k iOS app downloads and about 100k Android app downloads.

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