As part of its diversification strategy, Klarna is expanding into e-commerce to help it grow and attract new clients.

Klarna, the pioneer of buy now, pay later (BNPL) services in Europe, is entering the e-commerce space. Early in 2021, the company made updates to its app that allowed users to directly shop with over 250,000 retailers—both partners and non-partners—turning it into an online marketplace. The acquisition of Hero, a virtual social purchasing platform, was announced in July 2021.

This action demonstrates Klarna's aim to transform how customers interact with online shopping. With the use of Hero's technology, online customers may have a more customized experience by having live video or chat conversations with store assistants. By providing in-person customer assistance through an online experience, this social e-commerce solution reduces the distance between online and real retail shopping. Customers will benefit from this more than from merely reading internet reviews or visiting a website. In comparison to traditional online purchasing, Hero claims that its approach reduces cart abandonment at checkout by 40%.

It is becoming more and more crucial for e-commerce platforms to provide solutions that improve customers' online experiences, given the explosive growth of e-commerce (especially mobile commerce).

Through the transformation of its app into an online shopping center, Klarna is able to track customers' purchases all the way from discovery to payment. This is a significant benefit for Klarna because it allows them to gather a lot of information about customer behavior. Consequently, by enhancing its behavioral model and creating a personalized experience for every user, this data can help the company generate more revenue by increasing stickiness and retention. Furthermore, Klarna made other acquisitions in the e-commerce sector in July 2021 besides the Hero deal. Additionally, it bought Stocard, a company that lets users store their loyalty cards inside of an app on their smartphone.