Fintech firm Klarna overhauls its app with a TikTok-like discovery feed as A.I. hype swirls

cnbc.com:

Klarna announced a sweeping redesign of its app, adding a TikTok-inspired discovery feed powered by artificial intelligence, customized shops for social media content creators, and the ability to sell secondhand goods.

The Swedish «buy now, pay later» pioneer said Tuesday that its new design would help users find the items they want by using more advanced AI recommendation algorithms, while merchants will be able to target customers more effectively.

The AI will build a personal profile of shoppers based on their shopping behavior and which brands they like. They'll then be shown recommendations from Klarna's network of 500,000 retailers, which includes Nike, H&M and Instacart. Klarna counts over 150 million users globally — including users accessing its online checkout tools via retailers.

According to David Sandstrom, Klarna's chief marketing officer, the firm took inspiration from Chinese tech platforms, which he said have mastered the art of algorithm driven-shopping.

«In China, a couple of years ago, 90% of transactions started with a search,» Sandstrom said. «Nowadays, less than 50% of purchases start with a search because recommendations are so tailored to them.»

«Our ambition is to basically offer people products and brands before they knew they wanted them,» he added.

TikTok, in particular, has become the envy of major online platforms, thanks to its advanced targeting. The company has been rapidly growing its e-commerce business, which handled a reported $1 billion in sales in the first quarter, according to The Information.

Still, Sandstrom admits Klarna's technology is nowhere near as sophisticated as TikTok's — but he's confident the company can get to that level one day.

«It would be naïve to compare us to