Artificial Intelligence is increasingly embedded across the online retail value chain — from product discovery and recommendations to pricing, logistics, fraud detection and customer service — making digital commerce more personalised, efficient, and data-driven, LocalCircles survey said. 

According to the nationwide survey, about 68% of respondents said they would like to use AI in the next 12 months to check the authenticity of products and sellers. Around 64% want AI-driven product discovery and personalised recommendations, while 56% aim to use AI for comparing products and prices and verifying the authenticity of reviews. 

Additionally, 46% expect AI to help resolve doubts faster, 36% to track price trends or discounts and 22% to assist with creating shopping lists or planning purchases. 

The survey gathered over 75,000 responses from consumers across 332 districts in India to understand online shopping challenges and AI expectations. Of the respondents, 67% were men and 33% women; 44% were from Tier 1 cities, 32% from Tier 2 and 24% from Tier 3, 4, 5 and rural districts. 

When asked where they would prefer to begin their AI-enabled shopping journey, 49% said they would rather use AI tools integrated within e-commerce apps or websites. Only 17% preferred starting via external AI prompt windows, and 9% opted for personal shopping assistant apps.

Personalisation and discovery at the core 

One of the most visible applications of AI in e-commerce is personalised recommendation systems. Global platforms such as Amazon use machine learning models to analyse browsing behaviour, purchase history and contextual signals to suggest relevant products, improving conversion rates and average order value. 

In India, platforms like Flipkart and Myntra deploy AI to curate personalised homepages, festive collections, and stylist-based suggestions. Myntra also integrates AI-powered visual search and virtual try-on tools to enhance engagement in fashion retail, where fit and aesthetics are crucial. 

Generative AI is also redefining search and discovery. Consumers can now make conversational queries such as requesting gift suggestions within a specific budget and interest category, with AI systems generating curated shortlists instead of displaying thousands of listings. This reduces search friction and mirrors the experience of interacting with a human sales assistant. 

Rise of ‘zero-click’ shopping 

Globally, AI integration is triggering a strategic shift in control over the online shopping journey. Technology firms such as Google and AI-native platforms like Perplexity AI are building systems capable of searching products, comparing prices, summarising reviews and potentially completing purchases without redirecting users to retailer websites. 

Google’s AI-driven search summaries exemplify the emerging “zero-click shopping” model, where consumers remain within the search ecosystem. Retailers argue that such AI intermediaries risk turning them into back-end inventory providers rather than consumer-facing brands. 

Tensions are surfacing globally, including reported disputes between Amazon and Perplexity over automated purchasing tools, highlighting growing competition over customer ownership and transaction control. 

AI in supply chains and customer service 

Beyond front-end experiences, AI plays a critical role in operations and supply chain management. Companies such as Alibaba Group integrate AI across demand forecasting, warehouse automation and last-mile logistics using advanced analytics and robotics. AI-driven inventory optimisation reduces stockouts and overstocking, while predictive systems enhance delivery efficiency during large-scale events. 

AI-powered chatbots and virtual assistants provide 24/7 customer support, handling returns, tracking orders and resolving complaints. In India, voice shopping and regional-language interfaces are expanding digital access to new consumer segments. AI is also strengthening fraud detection by identifying suspicious transaction patterns in real time. 

Industry studies suggest AI-driven personalisation can significantly increase revenues and conversion rates, positioning AI as central to modern e-commerce strategy. 

What Indian consumers find most challenging 

When asked about the most time-consuming aspects of online shopping, 69% of respondents said finding the right product or service takes the most time. Nearly 49% struggle to identify the best combination of price, delivery time and return policy across platforms. About 43% find verifying seller credentials difficult while 40% face challenges in determining whether reviews and ratings are authentic.