FinTech firm Klarna overhauls app with TikTok-like discovery feed amid AI hype

The artificial intelligence (AI) revolution is taking over and has only accelerated in recent months. As a result, companies are making quick turns to jump on the trend and adopt the prowess of this new technology revolution. Recently, fintech firm Klarna announced a massive redesign of its app while adding an AI-powered TikTok-inspired discovery feed. Moreover, it also introduces tailor-made stores for social media content creators, along with the ability to sell second-hand goods.

On Tuesday, April 25, the Swedish fintech firm said the design overhaul is to help users find the items they want by using some advanced AI recommendation algorithms. This will also help the sellers target their customers more effectively.

Based on the shopping behavior of shoppers and the brand they like, AI will build a personalized profile for shoppers. The buyers will thus receive recommendations from Klarna’s 500,000 retailers, including some of the top players such as Nike, H&M and others. Fintech platform Klarna currently caters to more than 150,000 users globally.

David Sandstrom, Klarna’s head of marketing, said the decision comes after inspiration from Chinese technology firms. Top Chinese shopping platforms have harnessed the power of algorithm-driven shopping. Sandstrom said:

“In China, a couple of years ago, 90% of transactions started with a search. Today, less than 50% of purchases start with a search because the recommendations are so tailored to them. Our ambition is basically to offer people products and brands before they knew they wanted them”.

Klarna draws inspiration from TikTok and ChatGPT AI

Short video sharing platform TikTok has been the current leader in introducing new features and almost every other competitor wants to copy them. Furthermore, the advanced targeting features have made TikTok the preferred choice of e-commerce businesses to advertise on the platform.

Kalrna is looking to make a similar move, but Sandstrom admits to the fact that it’s nowhere near as sophisticated as TikTok. “It would be naive to compare us to TikTok’s recommendation engine. It would be a blatant lie to say we are close to it,” he said. – But we have the conditions to do so.

But like other tech companies, Klarna doesn’t want to hold back from incorporating AI software to tailor its content in a much better way for its users. Previously, Klarna also launched the ability to integrate OpenAI’s ChatGPT into the service along with a plugin that allows users to ask the popular chatbot platform for shopping inspiration.

But instead of relying on AI alone, Klarna looks to further customize its services and recently launched the “Ask Klarna” feature. This allows customers to chat with or seek video advice from specialists.

Furthermore, Klarna is launching a tool that will allow content creators to set up their own storefronts while promoting goods from brands with which they have associated agreements. Called “Creator Shop”, Klarna will launch this service in the USA.

Moreover, Klarna also plans to launch a self-service tool for advertisers called “Ads Manager”, which will allow marketers to track paid product listings. With advertising, Klarna plans to reduce its dependence on fees from sellers.

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