Artificial Intelligence in Retail and E-Commerce Market in India 2023 - 2028

Artificial Intelligence in Retail and E-Commerce Market in India 2023 - 2028

In the field of retail and e-commerce, artificial intelligence encompasses the application of advanced technologies like machine learning and data analytics to enhance and automate various aspects of these industries. AI enhances consumer experiences through personalized recommendations, optimizes inventory management, and facilitates data-driven decision-making, leading to heightened sales and operational efficiency. Additionally, it plays a crucial role in fraud detection, supply chain optimization, and marketing strategies, supporting organizations to thrive within the digital marketplace.

Market Insights:

The Indian artificial intelligence (AI) market in retail and e-commerce reached a value of INR 3,305.97 million in 2022 and is anticipated to grow to INR 16,929.87 million by 2028, exhibiting a compounded annual growth rate (CAGR) of 28.78% from 2023 to 2028. The increasing adoption of big data analytics and AI in the retail industry is driven by technological advancements, higher application and smart device penetration, widespread adoption of cloud services, and the proliferation of the Internet of Things (IoT). AI is playing a pivotal role in accelerating decision-making processes in product management, marketing, e-commerce, and various business sectors by bridging the gap between insights and implementation.

Market drivers:

Artificial intelligence plays a pivotal role in enhancing the overall customer experience in the retail and e-commerce sectors. Through AI-powered algorithms, businesses can analyze extensive amounts of customer data, encompassing purchase history, preferences, browsing behavior, and interactions. This predictive capability of AI aids in anticipating demand trends, leading to improved inventory management, demand forecasting, and optimization of supply chain logistics. In a fiercely competitive market, the adoption of AI offers a strategic advantage. Retailers and e-commerce platforms leveraging AI technologies stay at the forefront by providing innovative solutions and services that attract customers and elevate brand perception.

Market challenges:

Several retailers encounter concerns related to the quality of their data, including issues of incompleteness, inconsistency, and errors. Additionally, data may be dispersed across various platforms or stored in silos, complicating its accessibility and integration for AI applications. Successful implementation of AI in retail necessitates a trained workforce proficient in AI technologies, data science, machine learning, and related fields. However, the job market faces a shortage of professionals possessing these specialized skills. AI systems often require extensive data, including personally identifiable information about clients, raising concerns about data collection, storage, and usage.