8 Ways In Which AI Is Boosting E-Commerce in India

8 Ways In Which AI Is Boosting E-Commerce Industry in India

January 7, 2022

AI is Boosting E-Commerce: The e-commerce sector has revolutionized the way business is conducted in India. In fact, the industry has mushroomed to become the country’s fastest growing sector even in the middle of the havoc wreaked by the pandemic. The Indian e-commerce market is projected to grow to $200 billion by 2026. A surge in internet and smartphone usage has sparked most of the industry’s growth. Technology-enabled innovations have also propelled the growth of the industry. 

Emerging technologies such as Artificial Intelligence have advanced to become an integral part of the e-commerce sector. In fact, in light of the developing trend, many e-commerce firms are actively employing various AI solutions to understand customers’ purchasing patterns and for offering relevant recommendations at the right time. This not only helps in increasing sales but also allows the businesses to get an edge over their competitors. 

Ways In Which AI Is Boosting E-Commerce In India

The e-commerce sector is evolving at a rapid pace and is constantly leveraging emerging technologies to enhance business decisions and plans. Artificial Intelligence has truly unleashed the potential of the e-commerce market, presenting a slew of new opportunities to improve customer experience and drive sales. But the question that arises is how is AI aiding the growth of e-commerce businesses? 

AI Can Provide A Personalized Shopping Experience

AI is conquering the e-commerce sector by providing a personalized shopping experience. AI-enabled solutions can examine the buyers’ preferences in real-time and recommend relevant products. AI can play a significant role in understanding customer behaviour through analysis of clicks, shopping carts, search queries and previous purchases. This analysis can play an important role in providing relevant and helpful recommendations for further purchases. This not only enhances consumer experience but also helps the business in driving more sales than the traditional approach.  

For instance, when we shop on platforms such as Amazon, we often see the ‘Frequently Bought Together’ section. This section recommends products frequently bought together along with a specific product in the same purchase session. Under the hood, when a list of items are viewed, the AI algorithm puts together a list of products frequently bought with that product based on the customer’s buying behaviour and purchase history. Amazon also uses item-to-item collaborative filtering to make high-quality recommendations to the users. 

AI Is Enabling Visual Search 

A picture is worth a thousand words. Natural Language Processing (NLP) can narrow down and contextualize search results to optimize user experience for online shoppers. AI can enable visual search capabilities to match the product a user is looking for. This can help the consumer discover the products they want by first obtaining visuals from the given search query. It is well-known that images have a higher appeal as compared to words and this strategy gives businesses a great advantage. After all, the consumer can be more satisfied while shopping for the things they are actually looking for instead of drowning in a sea of foreign products that are irrelevant to the search. 

Chatbots For Quick Query Resolution

A consistent focal point for any e-commerce business is the way it communicates with its customers. E-commerce businesses are constantly looking for new and innovative touch points with customers that are personalized, contextual and conversational. A crucial business strategy is to use Artificial Intelligence to develop chatbots in this era of conversational commerce. 

Chatbots can take on some of the key tasks involved in operations and marketing. The best part is that chatbots automate customer service while remaining cost-effective. More importantly, chatbots help in addressing most of the customer queries almost instantly. This is way more efficient as compared to other alternatives such as contact forms, telephone calls or emails. After all, in case a customer is unable to resolve their query through the Chatbot, they can always get in touch with alternative contact options. Notably, bots can communicate with customers through text as well as calls. 

AI Is Boosting E-Commerce in India through chatbot

Slack and Facebook Messenger also have AI chatbots. The great thing about these chatbots is that they can adapt to any language and respond accordingly. This is particularly useful in handling international requests. 

AI Can Re-target Potential Buyers And Improve Lead Generation

As per a study from CSO Insights, 68% of businesses struggle with lead generation. Another research by Conversica indicates that 33% of leads are not followed up by the sales team. This means that the company cannot hit its target conversion rate because many potential buyers do not make it to the purchase. Moreover, many companies often have access to huge amounts of consumer data that they do nothing or little with. Companies fail to realize that this data is a goldmine of intelligence waiting to be tapped. 

For instance, if a customer spends a lot of time on the page of a specific product, say a speaker, there could be a chance that they are interested in buying a speaker. This data is recorded for use on the customer’s future visit to the online store. We can use this information to offer customised offers to the customer based on their in-store dwell time. This is a great strategy to remarket products to potential buyers. 

Artificial Intelligence is driving more sales as businesses start connecting with customers in a true manner. It’s as if the companies have acquired the power to read the minds of their customers and are leveraging that information to drive sales and improve the consumer experience. All this is possible thanks to the availability of data and the power of Artificial Intelligence. 

AI Can Automate Menial Tasks

Time and again, scientists have highlighted the importance of the synergy of AI and robotics to develop a robotics-integrated workforce. While some are of the opinion that the rise of machines will be the end of us, many experts believe that smart technologies such as AI are here to unleash inexhaustible power and potential in the workplace, among other things. In the e-commerce sector, AI is enhancing warehouse management for businesses. AI robots never show up late for work and can work 24/7. Moreover, they do not take lunch breaks and do not require paid leave. Such is the power of automation in the workplace. Leveraging robotics can reduce the chances of errors as compared to the human counterpart. 

AI is boosting e-commerce operations through robots
Warehouses can also leverage other technologies such as the Internet of Things (IoT) and Virtual Reality (VR) in conjunction with AI. In some cases, robots can oversee warehouse operations. They can also evaluate the risk associated with various activities through analysis. 

Automation has become essential to sustain large-scale e-commerce businesses. With the growing tasks, robots can help alleviate much of the burden by taking over menial tasks such as pick-and-pack processes as well as intelligent tasks such as automated price analysis and risk assessment. 

Dynamic pricing

As discussed earlier, AI can take over a multitude of tasks to enhance business operations. This includes automated pricing management. Businesses don’t have to spend hours comparing their pricing with that of their competition. They can use an amalgamation of machine learning, AI and other algorithms to identify pricing patterns from data and to determine the optimal pricing strategy without putting in hours of manual work. 

Dynamic pricing is a pricing strategy that uses big data analysis to work on the pricing of products based on the company’s expenses and the competitor’s pricing. With the help of dynamic pricing, companies do not have to rely on pricing their products based on the stock left. Instead, e-commerce companies can leverage the power of data and advanced analytics to determine the best price point for their products at any given time. 

For instance, if you are an e-commerce business, you can increase your prices if your competitor’s products might go out of stock. If a consumer wants to buy the product immediately, there is a high chance that they will not mind paying a slightly higher price to obtain that product sooner. Dynamic pricing can also be used to lower prices in order to reach the target conversion rates. 

Automated Product Tagging and Catalogue Management

These days, both B2B and B2C customers are quite used to searching for product information and then buying the product online. Perhaps one of the greatest challenges faced by businesses is that they cannot help the customers find the product they are actually looking for as they possibly could in the case of brick and mortar stores. Thus, it becomes imperative for any e-commerce business to maintain a well-managed online product catalogue to assist the customers in finding their desired products smoothly. A clear and informative product catalogue also goes a long way in instilling trust and confidence within the customers. 

AI solutions can be used to acquire data for obtaining better insights of product catalogues. In fact, it can also aid in labeling and binning products into the appropriate category to enhance business operations and improve the consumer experience. To get a perspective, imagine a catalogue with tens of thousands of products with varying colours, shapes, sizes and other specifications. It would take a lot of manual work to tag each of the products correctly. Here’s where AI-enabled automatic tagging software comes as a life saviour. It can automatically organize and tag the products based on their features. This is why many e-commerce businesses have incorporated this technology which has become a crucial component of the sales strategy. 

Filtering Illegitimate Reviews 

The customer’s voice has become very influential in the e-commerce industry. Since customers cannot see a product physically before buying it, the ratings and reviews of the product greatly determine whether it will be successful. According to a survey, 97% of consumers reported that customer reviews played an important role in affecting their shopping decisions. This shows just how important it is to tackle fake negative reviews that can lower sales. 

Many e-commerce companies use Artificial Intelligence to combat fake reviews meant to sabotage the brand. For instance, Amazon uses machine learning to fight false product reviews and to ensure that reviews from verified customers are given more weightage and are boosted for visibility. This is extremely crucial for the company to instil confidence in the customers regarding Amazon. 

Leading Indian E-Commerce Firms That Are Leveraging AI To Boost Operations


Flipkart’s AI ‘Project Mira’ was introduced way back in 2017. It uses AI to blend online and offline shopping experience. The inspiration of the project was to reduce the daily return rate of different products. Flipkart identified that the return rate was majorly due to the disconnect between the customer’s expectations and the quality of the delivered product. ‘Project Mira’ was created after analysing the pattern behind the product returns. 

The project’s major goal was to provide the customers with an in-store experience with AI performing the duties of a real sales associate. As reported by Economic Times, “Say, someone comes to Flipkart searching for an air-conditioner. Because of Project Mira, Flipkart now asks buyers about what kind of AC they want, the tonnage, room size, brand, and such. It is a beginning in helping customers find the exact product they need in online settings that aren’t exactly easy to navigate.”

Flipkart also partnered with Microsoft in 2017 to take up Microsoft Azure as its exclusive public cloud computing platform. During the course of these events, Flipkart also announced its plans of using AI, machine learning in Azure and Power BI with the objective of leveraging its data for innovative retailing, customer support, marketing and advertising. 

Amazon India

Amazon India has always been committed to experimenting with technology to enable smart e-commerce. Amazon has used AI and machine learning for a variety of applications as discussed above. In addition, an interesting use case is leveraging machine learning to identify junk addresses. This is very crucial in India where addresses are often poorly structured with incorrect or missing information. Wrong addresses lead to logistics hassle and sometimes the delivery executives fail to deliver the product within the stipulated time. The company is using AI to compute address quality scores, fix incorrect pin codes and assist users with suggestions to correct wrong addresses. 

Amazon is also using AI to make product size recommendations when a customer visits a particular product page. The algorithm uses information from past purchases (indicating correct size) and past returns (indicating incorrect size) to determine the ideal size for the customer.  

The company uses machine learning to identify products that might be associated with popular festivals in India such as Diwali, Christmas, Holi, etc. These are products which are in high demand during the festivals. ML can be used for dynamic pricing during these festivals to offer discounts and achieve a specific sales target. 

The Future

In a nutshell, we have looked at how companies can leverage the power of Artificial Intelligence to boost profit margins. As the e-commerce world gets more saturated by the day, a business should be both smarter and faster than its competitors to survive the harsh competition. Smart technologies can enable companies to analyse thousands of interactions on a daily basis, before targeting the most prominent leads. 

Companies should invest in emerging technologies to be able to compete with e-commerce giants such as Amazon and Flipkart. As seen above, there are a plethora of applications through which AI is boosting e-commerce in India. These applications can help businesses fit the needs of their customers and stand out in the market. If leveraged in the right manner, it can do wonders for the business and the customers.  

In the future, Artificial Intelligence is expected to have a huge impact on the e-commerce industry. There is ample evidence suggesting that new AI-driven platforms will revolutionise the e-commerce industry. As Sundar Pichai points out, “AI is probably the most important thing humanity has ever worked on. I think of it as something more profound than electricity or fire.”


One Comment

  • artificial intelligence services and solutions

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