BR Interview | Łukasz Dwulit, Head of CEE at Klarna

Łukasz Dwulit, Head of CEE at Klarna, has been leading the expansion into Central and Eastern Europe’s (CEE) market for the past 2 years, having facilitated the company’s entry into the Polish, Czech, Romania, and Hungarian markets. With a diverse business development background, Łukasz navigates Klarna’s innovative BNPL solutions in this dynamic region. In this interview, he discusses Klarna’s unique services, technological advancements, and strategies for growth in the CEE e-commerce landscape.

Can you start by explaining what Buy Now Pay Later (BNPL) is for our audience and how it works in general?

BNPL payments give consumers the opportunity to purchase and receive the purchased product before full payment is made. In the case of Klarna, consumers in Romania can now split payment for purchases into 3 equal installments. The first payment is settled at the time of purchase, while the other two are automatically charged to the debit card every 30 days. Meanwhile, the seller receives the entire payment immediately. This arrangement empowers customers to manage their finances effectively, while sellers enjoy the full revenue from their products or services.

Klarna is a prominent player in the BNPL industry. Could you provide some insights into how Klarna’s BNPL services are unique or differentiated compared to other providers?

Klarna stands out for several reasons, one of which is its role as an equitable alternative to traditional credit systems. By offering interest-free installments, Klarna removes interest charges, creating a transparent and more sustainable payment experience for its users. Furthermore, Klarna empowers shoppers to make well-informed decisions. It simplifies price comparison and enables users to explore various offers, helping them discover the best deals and make confident purchasing decisions.

Our market research reveals some intriguing insights. A striking 93% of respondents expressed their desire for a convenient way to track all their deliveries in one place. Additionally, 38% highlighted the frustration of searching through their email inboxes for order confirmations, delivery updates, and tracking numbers. In terms of convenience, Klarna truly excels. Customers can effortlessly monitor their deliveries using a centralized platform, eliminating the need to sift through numerous emails. What’s more, the Klarna app streamlines the shopping experience by offering features like hassle-free returns and expedited checkouts.

How is Klarna leveraging AI and other cutting-edge technologies to enhance its payment network and shopping assistance services, and what specific benefits do these technological advancements offer to both customers and merchants?

For some time now, Klarna has been exploring the vast possibilities offered by the use of AI. We have set our sights on working with OpenAI to create a plug-in for ChatGPT that allows users to receive personalized shopping recommendations, providing a superior experience for users seeking shopping advice. We introduced an AI-powered shopping feed in our app, which offers personalized, real-time product recommendations based on a user’s preferences, their previous searches and purchases. About two weeks ago, admittedly only in a few markets for now, we debuted Shopping Lens, a feature whereby the app redirects users the offer of this specific product or similar products based on a photo.

The same is true of the so-called Shoppable Video, currently live in several markets, which allows consumers to view influencer tutorials and shop items directly from the video. Right now, most of these new products are only available in selected markets, but our general plan is to have the same products in all markets in the future. Our commitment to artificial intelligence not only transforms the shopping journey, but also establishes a symbiotic relationship between consumers and brands in a connected, data-driven landscape.

Klarna recently launched its services in the Romanian market. Can you share some key insights into the challenges and opportunities you’ve encountered since entering this market? Romania has its own unique economic and cultural characteristics. How has Klarna tailored its services to cater to the specific needs and preferences of Romanian consumers?

In recent years, the Romanian e-commerce market has seen significant growth, a trend expected to continue. As a crucial player in the CEE region, we entered a market with established competition and familiar deferred payment practices. While this presents a challenge, we believe increased competition benefits consumers. Our goal is to gain customer trust and meet their expectations with our unique offering.

We aim to be a growth retail partner for local companies, leveraging Klarna’s global presence to support sellers in both local and international markets. Our strategy for the Romanian market involves closely monitoring local dynamics, adapting to evolving needs, and ensuring sustainable growth. Drawing from positive experiences in various Central European markets, Klarna’s solutions have been well-received by both buyers and sellers. Romania’s thriving e-commerce landscape attests to its rapid growth, establishing it as a notable digital economy in the CEE region.

Recognizing that BNPL services are not new to Romanian users, our challenge is to stand out from the competition. Klarna distinguishes itself by offering more than just BNPL products: it provides a comprehensive shopping ecosystem where consumers can manage budgets, track shipments, process returns, and find the best deals.

Could you elaborate on Klarna’s strategy for the Central and Eastern European (CEE) region? What specific factors led to the decision to expand into this region, and how does it fit into Klarna’s global strategy?

Klarna’s consumer research paints a compelling picture: 85% of Romanians engage in monthly online shopping, with an impressive 56% doing so even more frequently. Furthermore, our findings reveal that over 45% of Romanians express a preference for an interest-free, Buy Now, Pay Later service when making substantial purchases. This highlights a genuine demand for alternative payment options, a demand that we are poised to fulfill.

The Central and Eastern European (CEE) region has remained a focal point of our strategic endeavours, and our entry into the Romanian market underscores our unwavering commitment to extending our diverse range of offerings to this area. Over recent years, we’ve witnessed the rapid and thriving growth of e-commerce in Romania, and there’s been a marked increase in interest among our global partners for this dynamic market.

Can you share some results and milestones achieved in the CEE region? How has the market responded to Klarna’s offerings in this region, and what are your expectations for future growth?

At the moment, we are live in four CEE markets. We launched Poland 2 years ago, the Czech Republic more than a year ago, since June we are present in Romania, and most recently, mid October, we also launched the Hungarian market. These are huge milestones, very important for us as a company. This of course couldn’t be possible without brands, like LPP Group, Footshop, Zoot, and About You, that we are cooperating with on various markets across Europe – the fact that they decided to cooperate with us on new markets proves that Klarna is a trustworthy business partner and our products respond to clients needs.

The CEE region is very important for Klarna. Of course, it takes a long time to open new markets, but we see a lot of interest from both brands and consumers in our products. Currently, in Romania and Hungary, we are focusing on getting to know local preferences and needs, so that we can best respond to them. At this stage, we are primarily concerned with developing our product offering and the portfolio of available brands.

Your background includes experience in business development in various regions, including Asia, the US, and Europe. How has this diverse professional background influenced your approach to leading Klarna’s expansion in the CEE region?

My past experience has allowed me to work with people with different backgrounds, experiences, coming from different cultures. I think it’s extremely valuable when you have to oversee the development of several, after all, different markets – even if they are culturally similar to each other, like the markets in the CEE region, each of them has its own conditions, to which you have to be open, perceptive and sensitive. In addition, I think that due to the fact that earlier in my work I focused primarily on expansion and acquiring new partners, but did not work in fintech, I can now approach merchants with a unique perspective and understand their needs and the conditions of their business. Working with Klarna allows me to be more in touch with retailers, enabling me to look at their business from an external point of view. This perspective enables me to provide them with the tools and products they need to improve and grow their business.

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