Alibaba Group buys small stake in Klarna

Ant Financial, an affiliate of Alibaba Group, takes a small take in Swedish payment service provider Klarna. Klarna is Europe's most valuable fintech company. With this acquisition, the two companies aim to strengthen their online shopping partnership.

Klarna is already embedded in AliExpress, the international shopping platform which is run by e-commerce giant Alibaba Group. Klarna's CEO, Sebastian Siemiatkowski replied to Reuters: "the current partnership where Klarna payments are available in AliExpress should now expand to new markets globally." The companies aim to develop new products as well.

Expanding to different markets

Swedish payment service provider Klarna was founded in 2005. It enables consumers to buy online without having to provide payment details to a merchant they are buying from. Klarna pays for the order instead, which afterwards is dispatched. The buyer receives an invoice from the payment service provider. Typically, the buyer has a 14 to 30 day period to settle.

The partnership with Ant Financial does not mean Klarna will enter the Chinese market. Siemiatkowski comments he believes other markets offer more opportunities, especially due to the progressive digital Chinese economy, mainly in the field of apps. “The U.S. is often used as a benchmark of what it means to be competitive. In my world, it just does not compare to the Chinese one,” Siemiatkowski states.