Technology and artificial intelligence (AI) are revolutionizing India’s e-commerce industry
Nowadays, digitalization is causing a change in a wide range of businesses, and e-commerce is no exception. A widespread shift in customer behaviour brought on by growing internet usage has broadened the industry’s operating horizons. The Indian e-commerce sector is anticipated to reach $120 billion by 2026, per research by FICCI. By 2033–2034, the Indian e-commerce sector is anticipated to overtake its American and Chinese rivals, according to various projections.
Retail businesses are increasingly competing against one another by enhancing the consumer experience, facilitating access, utilizing digital data, and creating alluring promotional offers. The next growth revolution in the Indian e-commerce market is being driven by newly developed and quickly expanding technologies like artificial intelligence, data analytics, and online payment gateways like the Unified Payments Interface (UPI).
Due to this, businesses are already making extensive use of these technologies to shape customer behaviour, reinforce supply chains, and significantly expand their operations in Tier 2 and Tier 3 markets in India.
Using AI to customize the client experience
One of the major technological advances that have greatly changed e-commerce recently is artificial intelligence. Thanks to sophisticated AI techniques, consumers today enjoy best-in-class, customized, frictionless mobile commerce experiences. Increased internal efficiency, demand forecasting, business intelligence, better pricing, and better product placement are just a few of the ways that AI has benefitted e-tailers immensely.
E-stores no longer experience overstocking or understocking due to cutting-edge analytical capabilities made available by AI. These solutions have been employed by e-commerce businesses and brands to develop smart inventory control and warehousing practices. Additionally, this technology aids them in maximizing profits and streamlining the return procedure of goods. AI solutions have improved logistics and supply chains for efficiency in addition to inventory management. According to studies, AI applications in supply chains and logistics are expected to expand at a CAGR of 24% and reach $12 billion by 2027.
A targeted strategy utilizing data analytics
Through their online purchasing behaviours, such as product preferences, browsing history, and the amount of time spent on a website, modern data analytics tools monitor customer behaviour. Then, using predictive analytics, marketing efforts concentrating on specific or general buying behaviours are completely customized. These strategies are effective in connecting with customers and boosting sales.
For instance, if a specific demographic from North India tends to look for refrigerators or air conditioners when summer first arrives, e-commerce apps and websites would be fast to seize this information and utilize it to boost sales. For these consumers residing in North India, they will use this consumer behaviour to craft unique advertising campaigns and offers focused just on air conditioners and refrigerators. Thus, the likelihood of converting purchases rises as a website can weave such a story around what a customer wants.
Paying with ease and security keeps the registers ringing.
Due to the absence of safe payment gateways and the complicated payment procedures, Indian customers, who tend to be cash-oriented, were hesitant to make online purchases. For businesses attempting to build an omnichannel presence for their brands, this presented a significant hurdle. Research indicates that if the checkout and payment procedure is too complicated, 52% of shoppers will abandon their basket.
This issue has been solved by third-party secure payment gateways and wallets, which make transactions risk-free and simple. Peer-to-peer and person-to-merchant transactions involving significant sums of money are now free thanks to UPI, which has also changed the Indian payments system. All kinds of organizations and customers may conduct transactions easily thanks to UPI, an open-source application programming interface (API) that is interoperable with several platforms.
The only significant retail payment interface in India is UPI, according to the economic survey 2021–22. A significant shift in consumer behaviour has been brought about by research that also demonstrates that UPI has boosted users’ ability to spend money on daily necessities.
Using AR and VR, we can close the “virtual gap.”
Two-thirds of things are returned because they are incompatible, and the majority of checkout items do not convert into sold items. By offering a nearly lifelike appearance and feel of the items and improving the overall online shopping experience, virtual reality (VR) and augmented reality (AR) have the potential to change the world of retail. Virtual stores may be created by online retailers, giving customers a virtual shopping experience that comes quite close to visiting an actual store while staying in bed.
Customers may currently use an IKEA augmented reality catalogue app to see how specific furniture pieces might appear in their houses. According to the product’s measurements and specifications, customers may realistically envision how these products would appear and, more significantly, how they will fit in their homes.
In conclusion, despite the “E-comm giants” like Amazon, IKEA, and Flipkart making considerable progress in digitally optimizing every area of their business. By entering tier 2 and tier 3 marketplaces, small businesses like Meesho and Shopify are also developing tech-enhanced solutions to democratize and personalize the online buying experience. Customers, companies, and merchants in this area now live in a win-win ecosystem thanks to technology solutions.
The e-commerce sector has grown and is seeing more commercial growth than ever because of the growing integration of big data, artificial intelligence, virtual reality, and sleek payment systems. These technological advancements have changed the way people feel about e-commerce, making it more amiable and well-liked by consumers.
Edited by Prakriti Arora