Rivalry between e-commerce companies Klarna
and Paypal seems to prove to be exciting. It’s similar to sporting rivalries
such as Barcelona and Real Madrid in the footballing world or similar to that
of Redbull Racing and Ferrari in motorsports.
Klarna is popular within Nordic countries,
but have shown interest in branching out across the European Union. With
headquarters in Stockholm and a research team based in Israel, the company has
mentioned that this year it would be focusing its firepower on Germany while
keeping an eye on the United States, the home of Paypal, owned by eBay.
The e-commerce company has a near $1
billion valuation based on its latest financing round and has shown growth in
the northern countries of Europe since its inception in 2005.
How it works is Klarna affords the customer
with an opportunity to order an item without paying, and get a chance to feel
and touch the product, and if the customer is satisfied with the product then
they can pay.
So far, no company has managed to snatch
market share from online payment leaders PayPal, which was acquired in 2002 by
eBay for $1,5 billion and which makes over a third of total revenue. Klarna
completes an average of 70 000 transactions per day, with its 20 000
merchants and over 8 million customers.
Co-founder NiklasAdalberth mentioned
that it would be fun to challenge PayPal, but taking on Paypal in its own
background would be an uphill battle.
With Klarna showing magnificent growth,
PayPal’s executives cannot afford the luxury of being complacent or they will
find themselves eating a smaller piece of the pie.
Ashley
Mokwena
@ashfonik
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