Project Report

(Submitted for the Degree of B .Com. Honours in Accounting & Finance under

the University of Calcutta)

Title of the Project

“IMPACT OF ARTIFICIAL INTELLIGENCE IN E-COMMERCE”

Submitted by
Name of the Candidate: PUNEET KUMAR AGARWAL

CU Registration No: 017-1111-2034-22

CU Roll No: 221017-21-0719

Name of the College: THE BHAWANIPUR EDUCATION SOCIETY COLLEGE

College UID: 0101221801

Supervised by
Name of the Supervisor: DR. SREYASI GHOSH

Name of the College: THE BHAWANIPUR EDUCATION SOCIETY COLLEGE

Month & Year of Submission

1
Annexure-1.1

Supervisor's Certificate
This is to certify that MR. PUNEET KUMAR AGARWAL a student of B.Com. Honours in
Accounting & Finance THE BHAWANIPUR EDUCATION SOCIETY COLLEGE under the
University of Calcutta has worked under my supervision and guidance for his Project Work and
prepared a Project Report with the title IMPACT OF ARTIFICIAL INTELLIGENCE IN E-
COMMERCE which is submitting, is his genuine and original work to the best of my knowledge.

SIGNATURE:

NAME: DR. SREYASI GHOSH

DESIGNATION: ASSISTANT PROFESSOR

NAME OF THE COLLEGE: THE BHAWANIPUR EDUCATION SOCIETY COLLEGE

PLACE: KOLKATA

DATE:

2
Annexure-1.2

Student's Declaration
I hereby declare that the Project Work with the title “IMPACT OF ARTIFICIAL
INTELLIGENCE IN E-COMMERCE” submitted by me for the partial fulfilment of the degree of
B.Com. Honours in Accounting & Finance under the University of Calcutta is my original work and
has not been submitted earlier to any other University /Institution for the fulfilment of the
requirement for any course of study.

I also declare that no chapter of this manuscript in whole or in part has been incorporated in this
report from any earlier work done by others or by me. However, extracts of any literature which has
been used for this report has been duly acknowledged providing details of such literature in the
references.

SIGNATURE:

NAME: PUNEET KUMAR AGARWAL

ADDRESS: 136, JESSORE ROAD AVANI OXFORD PHASE- 2

BLOCK- 4 FLAT- 12D KOL- 700055

CU REGISTRATION NO: 017-1111-2034-22

PLACE: KOLKATA

DATE:

3
Annexure-1.3

ACKNOWLEDGEMENT

As a student of B.COM (HONOURS) SEMESTER 6 (3rd Year) of THE BHAWANIPUR

EDUCATION SOCIETY COLLEGE, CALCUTTA UNIVERSITY, I have got the opportunity
to do a project on “IMPACT OF ARTIFICIAL INTELLIGENCE IN E-COMMERCE”. I have
tried to cover all aspects of this topic. My work would not have been completed successfully without
the guidance of DR. Sreyasi Ghosh. She has helped me to plan out my lines of action for doing the
Project and provided me with all other necessary information.

I would like to express my deepest respect to all the faculty members of my college, my friends and
my family members who have guided me from time to time, to complete this project work
successfully.

4
 CONTENTS
S.NO TITLE PAGE NO
1. COVER PAGE 01
2. ANNEXURE 1.1 : SUPERVISOR’S CERTIFICATE 02
3. ANNEXURE 1.2 : STUDENT’S DECLARATION 03
4. ANNEXURE 1.3 : ACKNOWLEDGEMENT 04
5. CHAPTER 1 : INTRODUCTION TO IMPACT OF 06- 17
ARTIFICIAL INTELLIGENCE IN E-COMMERCE

1.1 : Background 07-08

1.2 : Introduction 09
1.3 : Rationale 10
1.4 : Objectives 11
1.5 : Limitation 12
1.6 : Features 13
1.7 : Literature Review 14-15
1.8 : Research Methodology 16-17
6. CHAPTER 2 : CONCEPTUAL FRAMEWORK 18-33

2.1 : Overview 18
2.2 : Government Initiatives 19
2.3 : National Scenario 20-26
2.4 : International Scenario 27-33
7. CHAPTER 3 : DATA ANALYSIS AND INTERPRETATION 34-53
8. CHAPTER 4 : CONCLUSION AND RECOMMENDATIONS 54-56

4.1 : Conclusion 55
4.2 : Recommendation 56
9. ANNEXURE 1.4 : BIBLIOGRAPHY 57
10. ANNEXURE 1.5 : QUESTIONAIRE 58-60

5
 CHAPTER-1

INTRODUCTION TO IMPACT OF ARTIFICIAL INTELLIGENCE

IN E-COMMERCE

6
 1.1 : BACKGROUND

The Impact of AI on E – commerce : A Decade Wise Evolution

Artificial Intelligence (AI) has significantly reshaped the E-Commerce landscape revolutionizing
how businesses interact with customers, Improve operations and Improve Productivity . Over the
decades, AI’S role in E -commerce has developed becoming a critical driver of innovation and
business growth.

1980s - Foundation of AI and Digital Commerce

In the 1980s, AI was primarily theoretical, with limited applications. Rule-based expert systems and
early neural networks were the main AI technologies, but they lacked the computational power for
large-scale implementation. During this period, E-Commerce was non-existent, and AI's role in
business was restricted to information storage and simple decision-making methods.

1990s - Early AI Applications and Rise of E-Commerce

The 1990s marked the emergence of the internet, laying the groundwork for E-Commerce. Major
companies like Amazon (1994) and eBay (1995) pioneered online shopping. AI began influencing E-
Commerce through:

 Recommendation Engines: Early collaborative filtering models suggested products based on

user preferences.
 Search Algorithms: AI-driven search engines helped customers find products more
efficiently.
 Fraud Detection: Basic AI systems were deployed to identify suspicious transactions.

2000s – Growth of Data Analytics and Personalization

With advancements in machine learning and big information , AI's role in E-Commerce expanded.
Key developments included:

 Personalized Recommendations: Platforms like Amazon leveraged AI to suggest products

based on user behaviour.
 Automated Customer Support: Basic AI chatbots started handling routine customer inquiries.
 Dynamic Pricing: AI systems focused prices based on demand and competitor prices.
 Search Optimization: Improved search engines provided better production discovery.

7
2010s – AI as a Game Changer

The 2010s saw AI become a core part of operations. Deep learning, Natural Language Processing,
and predictive analytics drove significant changes:

 Chatbots and Virtual Assistants: AI-powered bots like Facebook Messenger and Shopify chat
offered instant customer support.
 Predictive Analytics: AI models optimized inventory management and supply chain
operations.
 Visual Search: Platforms like Pinterest introduced image-based search capabilities.
 Voice Commerce: Smart assistants like ALEXA enabled voice-based production searches
and purchases.
 Hyper-Personalization: AI algorithms suggest product recommendations in real-time.

2020s – Automation and Conversational AI

AI's impact on E-Commerce accelerated in the 2020s with more sophisticated technologies:

 Conversational AI: Advanced chatbots using NLP and machine learning offered human-like
customer interactions.
 AI-Generated Content: Tools like Chat GPT helped create product descriptions and
marketing copy.
 Augmented Reality (AR): AI-powered AR allowed customers to virtually try products (e.g.,
Lenskart and Sephora).
 Predictive Supply Chain Management: AI optimized logistics and inventory to minimize
waste.
 Fraud Detection: Real-time AI algorithms improved transaction security.
 Sustainable E-Commerce: AI minimized environmental impact through better resource
management.

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 1.2 : INTRODUCTION

The advent of Artificial Intelligence (AI) has revolutionized the E-Commerce landscape, transforming
the way businesses operate, interact with customers, and drive revenue growth. The integration of AI
in E-Commerce has brought about a paradigm shift, enabling businesses to provide personalized
experiences, improve operational efficiency, and stay competitive in a rapidly evolving market.

E-Commerce has grown exponentially over the past decade, with online sales projected to reach $6.5
trillion by 2023. As the E-Commerce landscape continues to evolve, businesses are leveraging AI to
stay ahead of the competition and meet the evolving needs of customers. From personalized product
recommendations to conversational AI-powered customer support, AI has become an integral part of
the E-Commerce ecosystem.

The impact of AI on E-Commerce is multifaceted. AI-powered personalization enables businesses to

provide tailored experiences for individual customers, increasing engagement, conversion rates, and
customer loyalty. Conversational AI-powered chatbots and voice assistants have revolutionized
customer support, enabling businesses to provide 24/7 support, reduce response times, and improve
customer satisfaction.

AI-powered predictive analytics and machine learning algorithms enable businesses to forecast demand,
detect trends, and identify potential issues, optimizing inventory management and supply chain
operations. Additionally, AI-powered marketing and advertising enable businesses to investigate
customer behaviour, preferences, and interests, creating targeted and personalized campaigns that
drive conversions and revenue growth.

The adoption of AI in E-Commerce has numerous benefits, including improved customer experiences,
increased operational efficiency, and enhanced competitiveness. However, it also presents
challenges, such as data quality and integration, bias and fairness, and transparency and
understandability.

As AI technology continues to evolve, its impact on E-Commerce will only continue to grow. Emerging
trends and technologies, such as augmented reality, virtual reality, and autonomous retail, will
further transform the E-Commerce landscape. This project aims to explore the impact of AI on E-
Commerce, examining the various ways AI is transforming the industry, and discussing the benefits,
challenges, and future directions of AI adoption in E-Commerce.

9
 1.3 : RATIONALE

The integration of Artificial Intelligence (AI) in E-Commerce has transformed the industry, offering
numerous benefits and raising important ethical and societal implications. Here’s a summary of
rationale of the impact of AI on E- Commerce:

Key Benefits

 Enhanced Customer Experience: AI-powered chatbots, virtual assistants, and

recommendation engines provide personalized support and suggestions.
 Improved Operational Efficiency: AI automates tasks, predicts sales and demand, and detects
fraudulent transactions.
 Increased Revenue and Competitiveness: AI-powered marketing tools, dynamic pricing, and
competitive analysis enable businesses to stay ahead.
 Data-Driven Decision Making: AI-powered analytics provide insights into customer
behavior, market trends, and business performance.

Ethical and Societal Implications

 Bias and Fairness: AI systems can perpetuate biases and discrimination, highlighting the need
for fairness and transparency.
 Privacy and Security: AI systems require access to vast amounts of customer data, raising
concerns about privacy and security.
 Societal Impact: AI has the potential to exacerbate existing social inequalities, particularly in
areas such as education and employment.

Future Outlook

 Job Market Transformation: AI will create new job opportunities, require workers to up skill
and reskill, and potentially displace certain jobs.
 Increased Adoption: AI will become increasingly ubiquitous in E-Commerce, driving growth,
innovation, and competition.
 Regulatory Frameworks: Governments and regulatory bodies will need to establish
frameworks to address the ethical and societal implications of AI in E-Commerce.

10
 1.4 : OBJECTIVES

a) AI aims to Enhance Customer Experience by providing personalized product

recommendations, offers, and content, leading to increased customer satisfaction and loyalty.
Additionally, AI-powered chatbots and virtual assistants help resolve customer queries and
issues.
b) Another key objective is to Improve Operational Efficiency by automating repetitive tasks,
optimizing inventory management, and improving supply chain efficiency. This reduces
operational costs and improves productivity, enabling businesses to focus on strategic
decision-making.
c) AI also aims to Increase Revenue and Competitiveness by using targeted marketing, dynamic
pricing, and predictive analytics to drive sales and revenue. This enables businesses to stay
ahead of the competition and adapt to changing market conditions.
d) Furthermore, AI-powered Data-Driven Decision Making provides insights into customer
behavior, preferences, and needs, enabling businesses to develop targeted marketing
campaigns and improve customer engagement.
e) Competitive Advantage: Staying ahead of the competition with AI-powered innovation and
growth.
f) Security and Trust: Detecting and preventing fraudulent transactions, protecting customer
data.
g) Scalability and Flexibility: AI-powered solutions that can scale and adapt to changing market
conditions.
h) Improved Supply Chain Management: Optimized logistics, inventory management, and
shipping routes.
i) Enhanced Product Development: Analyzing customer feedback, preferences, and behavior to
inform product development.
j) Increased Customer Engagement: AI-powered chatbots, virtual assistants, and social media
analytics to engage with customers.
k) Real-time Analytics: Providing real-time insights into customer behavior, sales, and
inventory levels.
l) Automated Customer Service: Using AI-powered chatbots to provide 24/7 customer support.

11
 1.5 : LIMITATION

a) High Implementation Costs

Developing and integrating AI-powered solutions, such as machine learning models, chatbots, and
recommendation engines, require substantial investment in technology, infrastructure, and skilled
professionals. Small businesses may find it difficult to afford AI solutions.

b) Data Privacy and Security Concerns

AI relies on vast amounts of customer data for personalization and predictive analytics. However, handling
sensitive user information raises privacy concerns, and businesses must comply with data protection
regulations like GDPR and CCPA to avoid legal issues.

c) Dependence on Data Quality

AI’s effectiveness depends on the quality and quantity of data it processes. Inaccurate, out dated, or biased
data can lead to incorrect recommendations, poor decision-making, and ineffective marketing strategies.
Ensuring high-quality data is a continuous challenge.

d) Lack of Human Touch in Customer Service

AI-powered chatbots and virtual assistants can handle many customer queries, but they lack emotional
intelligence and human empathy. Complex or sensitive customer concerns may require human intervention,
as AI may not fully understand emotions and context.

e) Algorithm Bias and Fairness Issues

AI models can inherit biases from historical data, leading to unfair or discriminatory outcomes in product
recommendations, pricing, and hiring processes. Businesses must regularly audit AI systems to ensure
fairness and inclusivity.

f) Limited Creativity and Innovation

AI can inspect patterns and optimize existing processes but lacks the ability to think creatively like humans.
Tasks such as branding, storytelling, and designing unique marketing campaigns still require human
creativity.

g) Risk of Job Displacement

AI-driven automation reduces the need for human labour in areas like customer support, inventory
management, and marketing. This could lead to job losses in some sectors, requiring businesses to find ways
to up skill and reskill their workforce.

h) Ethical and Legal Challenges

AI-powered personalization and predictive analytics must be used ethically. Over-reliance on AI for decision-
making in pricing, recommendations, and customer interactions can lead to ethical concerns, such as price
discrimination or manipulation.

12
 1.6 : FEATURES
1. Personalization

 Product Recommendations: AI-driven algorithms suggest products based on customers'

browsing and purchasing history, increasing average order value and customer satisfaction.
 Content Personalization: AI helps create personalized content, such as product descriptions
and offers, tailored to individual customers' preferences.

2. Chatbots and Virtual Assistants

 24/7 Customer Support: AI-powered chatbots provide instant support, answering frequent
queries, and helping customers with their shopping experience.
 Order Tracking and Returns: Chatbots assist with order tracking, returns, and exchanges,
reducing customer support tickets.

3. Image and Voice Search

 Visual Search: AI-powered image recognition allows customers to search for products using
images, enhancing the shopping experience.
 Voice Search: AI-driven voice assistants enable customers to search for products using voice
commands, making shopping more convenient.

4. Predictive Analytics

 Demand Forecasting: AI algorithms examine sales data, seasonality, and trends to predict
demand, helping businesses optimize inventory and supply chain management.
 Customer Churn Prediction: AI identifies at-risk customers, enabling businesses to
proactively offer personalized incentives and improve customer retention.

5. Inventory Management and Logistics

 Automated Inventory Management: AI optimizes inventory levels, reducing stock outs and
overstocking.
 Route Optimization: AI algorithms optimize delivery routes, reducing shipping times and
costs.

6. Fraud Detection and Prevention

 Real-time Fraud Detection: AI-powered systems detect and prevent fraudulent transactions,
protecting businesses and customers from financial losses.

7. Customer Segmentation

 Behavioural Segmentation: AI helps segment customers based on behaviour, preferences, and

demographics, enabling targeted marketing and personalized experiences.

13
 1.7 : LITERATURE REVIEW
The integration of A.I in E-Commerce has revolutionized the online shopping experience. AI- powered
tools enhance customer engagement, personalize recommendations, and optimize business
operations. This literature review explores the impact of AI on E-Commerce, examining its effects
on businesses, customers, and the industry as a whole, highlighting key trends and insights.

1) Shah, M. & Mittal, M. (Eds.) (2023)

Description: "Strategic Innovations in Commerce, Data Security, and Technology

Management" explores the latest advancements in commerce, data security, and technology
management. This comprehensive reference book is a collection of research papers and case studies
discussing innovative strategies and technologies for improving business operations, protecting data,
and managing technology. Topics include E-Commerce, digital marketing, cyber security, data
analytics, and IT project management. The book provides insights into emerging trends, challenges,
and opportunities in the field.

Conclusion: This book is a valuable resource for business professionals, researchers, and
students seeking to stay updated on the latest trends and innovations in commerce, data security, and
technology management. It offers practical strategies for improving business operations, protecting
data, and managing technology, making it an essential guide for anyone interested in leveraging
technology to drive business success

2) Suresh Kumar (2024)

Description: Suresh Kumar's 2024 study explores the impact of AI-powered product
recommendations on E-Commerce sales and customer engagement. The research examines how AI-
driven recommendations influence customer purchasing decisions and overall satisfaction. Kumar's
study provides insights into the effectiveness of AI-powered recommendation systems in enhancing
E-Commerce sales performance and customer experience.

Conclusion: The study concludes that AI-driven product recommendations can significantly
increase sales and improve customer satisfaction. The findings suggest that E-Commerce businesses
can benefit from implementing AI-powered recommendation systems to enhance customer
engagement and drive sales growth. By providing personalized product recommendations, businesses
can improve the overall shopping experience and build customer loyalty.

3) Gunjan Malhotra, Manjeet Kharub (2024)

Description: The article "Elevating Logistics Performance: Harnessing the Power of

Artificial Intelligence in E-Commerce" explores the application of Artificial Intelligence (AI) in
enhancing logistics performance in the E-Commerce sector. The authors discuss how AI can
optimize logistics operations, including predictive analytics, route optimization, automated
warehouse management, and real-time tracking. They highlight the benefits of AI adoption in E-
14
Commerce logistics, including improved logistics efficiency, reduced costs, and enhanced customer
experience.

Conclusion: The authors conclude that AI has the potential to revolutionize logistics in E-
Commerce by improving efficiency, reducing costs, and enhancing customer satisfaction. They
emphasize the need for E-Commerce businesses to adopt AI-powered logistics solutions to stay
competitive and meet the evolving demands of customers.

4) Mitra Madanchian (2024)

Description: Mitra Madanchian's 2024 study investigates the impact of AI marketing on E-

Commerce sales. The research explores how AI-driven strategies, such as personalized
recommendations and predictive analytics, influence key metrics like customer acquisition and
conversion rates. The study analyzes various AI marketing tools and their effects on E-Commerce
sales performance. By examining the relationship between AI marketing and E-Commerce sales, the
study provides insights into the benefits and challenges of adopting AI-powered marketing strategies.

Conclusion: The study concludes that AI-driven marketing strategies have a positive impact
on E-Commerce sales. Specifically, the findings show that AI-driven marketing improves customer
acquisition, conversion rates, and customer lifetime value. This suggests that E-Commerce
businesses can benefit from adopting AI-powered marketing tools to enhance their sales performance
and customer engagement. Overall, the study provides valuable insights into the effectiveness of AI
marketing in E-Commerce.

5) Amit Kumar Jain (2025)

Description: Jain (2025) discussed the transformative impact of AI on various sectors,

including E-Commerce. The study highlighted AI's potential in enhancing customer experience,
personalizing recommendations, and optimizing business operations. Jain also explored the
challenges and limitations of AI adoption in E-Commerce, including data privacy concerns and the
need for human over sigh

Conclusion: This study underscores the significance of AI in driving E-Commerce growth

and innovation. The findings suggest that E-Commerce businesses can benefit from investing in AI
technology to enhance customer experience, improve operational efficiency, and stay competitive in
the market

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 1.8 : RESEARCH METHODOLOGY

The research methodology is a systematic way of

studying the research problem. The research
methodology means the way in which we can complete
our prospected task. Before undertaking any task it
becomes very essential to determine the problem of
study. I have adopted the following procedure in
completing my report study

1) Research Problem

The research problem is to investigate the impact of Artificial Intelligence (AI) on E-Commerce.
This involves examining the benefits and challenges of AI in E-Commerce, including its effects on
sales, customer engagement, and operational efficiency. The research problem is significant because
AI is increasingly being adopted in E-Commerce, and its impact on the industry is not yet fully
understood.

2) Research Design

The research design adopted for this study is a mixed-methods approach, combining both qualitative
and quantitative data collection and analysis methods. This approach allows for a comprehensive
understanding of the research problem, including both numerical data and narrative insights

3) Determining the data sources

Both primary and secondary data are required in this study. Primary data is the first hand information
collected directly from respondents. The tool used here is questionnaire. Primary Data is collected
through surveys conducted among existing executives and employees working in today’s E-
Commerce Environment, including some top level executives from some of the big E-Commerce
company.

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 4) Tools used for analysis of data

The survey process involved two phases: First phase included identification and selection of the
target audience to be studied and to determine the parameters on which respondents will justify their
preferences. A questionnaire was designed to collect the needed information from the respondents.
The Second Phase involves collection of the primary data by making the respondents fill up
questionnaires.

5) Analyzing the Data

The Primary or secondary data both would never be useful until they are edited and studied or
analysed. When the person receives the data many less useful data would also be there. So, I
analysed the data and edited it and turned it in the useful manner. So, that it can become useful in my
report study.

6) lnterpretation of the data

With the use of analysed data I managed to prepare my project report. But an analyzing of the data
would not help my study to reach towards its objectives. The interpretation of the data is required so
that the others can understand the Crux of the study in more simple way without any problem. So I
have added the chapter of analysis that would explain others to understand my study in simpler way.

7) Preparing research report

This is the last step in preparing the project report. The objective of the report writing was to report
the findings of the study to the concerned authorities. The research report includes an introduction,
literature review, methodology, results, discussion, conclusion, and recommendations. The report
provides a comprehensive overview of the research findings and implications, and includes visual
aids such as tables, figures, and graphs to facilitate understanding.

17
 CHAPTER-2

CONCEPTUAL FRAMEWORK
NATIONAL & INTERNATIONAL SCENARIO

18
 2.1 : OVERVIEW
I. Enhanced Customer Experience
 Personalization: AI-driven product recommendations based on customer behaviour,
preferences, and purchase history.
 Chatbots: AI-powered customer support for instant query resolution and improved customer
engagement.
 Virtual Assistants: AI-driven virtual assistants to assist customers in finding products,
tracking orders, and more.
II. Operational Efficiency
 Predictive Analytics: AI-powered predictive analytics to forecast demand, optimize
inventory, and streamline supply chain operations.
 Automated Order Processing: AI-driven automated order processing to reduce manual errors,
increase processing speed, and improve order fulfillment rates.
 Intelligent Inventory Management: AI-powered inventory management to optimize stock
levels, reduce waste, and improve product availability.
III. Marketing and Sales Optimization
 AI-driven Marketing: AI-powered marketing automation to personalize marketing
campaigns, improve customer segmentation, and optimize marketing ROI.
 Dynamic Pricing: AI-driven dynamic pricing to optimize prices based on demand,
competition, and customer behaviour.
 Product Recommendation Engines: AI-powered product recommendation engines to suggest
relevant products, increase average order value, and improve customer satisfaction.
IV. Risk Management and Security
 Fraud Detection: AI-powered fraud detection to identify and prevent fraudulent transactions,
reducing losses and improving customer trust.
 Cyber security: AI-driven cyber security to detect and respond to cyber threats, protecting
customer data and preventing security breaches.
 Compliance and Regulatory Management: AI-powered compliance and regulatory
management to ensure adherence to relevant laws, regulations, and industry standards.
V. Supply Chain Optimization
 Predictive Maintenance: AI-powered predictive maintenance to optimize logistics, reduce
downtime, and improve overall supply chain efficiency.
 Route Optimization: AI-driven route optimization to reduce transportation costs, improve
delivery times, and enhance customer satisfaction.
 Supplier Management: AI-powered supplier management to optimize supplier selection,
improve quality control, and reduce supply chain risks.

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 2.2 : GOVERNMENT INITIATIVES

Governments worldwide recognise AI’s transformative potential and are taking steps to promote its
integration in key sectors like E-Commerce. India’s National Strategy for Artificial Intelligence, led
by NITI Aayog, provides policies promoting adoption across industries. Furthermore, the
“Responsible AI for Youth” program seeks to empower young innovators to use AI technology to
solve real-world problems such as logistics and marketing issues.

Countries such as the United States and China are investing heavily in AI research and infrastructure.
For instance, the U.S. Department of Energy’s AI initiative seeks to enhance supply chain logistics,
which benefits E-Commerce; China’s “New Infrastructure Plan” stresses technological
advancements that may accelerate E-Commerce growth.

AI can offer immense transformative advantages yet adopting it comes with its own set of challenges
and ethical considerations. Data privacy worries, ethical use of AI in decision-making processes, and
closing digital divides are pressing concerns for E-Commerce businesses that use AI. Businesses
should find a balance between innovation and responsibility by guaranteeing fair processes that use
this powerful technology.

Artificial Intelligence’s predictive analytical capabilities rely on consumer data, so ensuring its security
and adhering to regulations like GDPR in Europe or India’s Personal Data Protection Bill are crucial
elements of customer trust-building. Businesses should implement safeguards as AI systems become
more autonomous to prevent bias or unintended outcomes from emerging

20
 2.3 : National Scenario

1. Paytm 's AI-Powered Fraud Detection

Paytm India's leading digital payments platform,

processes millions of transactions every day. With the
increasing volume of transactions, the risk of
fraudulent activities also rises. To combat this, Paytm
needed a robust fraud detection system that could
identify and prevent fraudulent transactions in real-
time.

Challenges

Paytm faced several challenges in detecting and preventing fraud:

 Scale: Paytm processes a large volume of transactions, making it difficult to manually review
each transaction for fraud.
 Complexity: Fraudulent transactions can be complex and difficult to detect, requiring
advanced analytics and machine learning algorithms.
 Speed: Fraudulent transactions need to be detected and prevented in real-time to minimize
losses.

Solution: AI-Powered Fraud Detection

Paytm implemented an AI-powered fraud detection system that uses machine learning algorithms to
identify and prevent fraudulent transactions. The system includes:

 Machine Learning Algorithms: Paytm uses advanced machine learning algorithms, such as
neural networks and decision trees, to analyze transaction data and identify patterns
indicative of fraud.
 Real-time Analytics: The system analyzes transactions in real-time, enabling Paytm to detect
and prevent fraudulent transactions before they are processed.
 Risk Scoring: The system assigns a risk score to each transaction based on various factors,
such as transaction amount, location, and user behavior.

21
 Results and Benefits

Paytm's AI-powered fraud detection system has achieved significant results:

 Reduced Fraud Losses: Paytm has reduced its fraud losses by 60% since implementing the
AI-powered fraud detection system.
 Improved Detection Accuracy: The system has improved detection accuracy by 40%,
reducing false positives and negatives.
 Enhanced Customer Experience: The system enables Paytm to provide a seamless and secure
transaction experience for its customers.
 Scalability: The system can handle large volumes of transactions, making it an ideal solution
for Paytm's growing user base.

2. Myntra’s AI Transformation

Myntra, a leading Indian E-Commerce

company, successfully transformed its
business model by embracing artificial
intelligence (AI). This case study,
authored by Leslie Joseph and six
contributors, highlights the key factors
that contributed to Myntra's AI-driven
success.

AI Transformation

 AI-powered recommendation engine: Myntra developed an AI-powered recommendation

engine that suggested personalized products to customers based on their browsing and
purchasing history.
 Image recognition: Myntra implemented an image recognition system that enabled customers
to search for products using images.
 Chatbots: Myntra introduced AI-powered chatbots to provide customers with personalized
support and recommendations.
 Predictive analytics: Myntra used predictive analytics to forecast demand, optimize
inventory, and improve supply chain efficiency.

22
 Key Takeaways

 Experimentation is key: Myntra's success with AI was largely due to its willingness to
experiment and try new approaches.
 Discipline is essential: Myntra's AI transformation required discipline and a structured
approach to ensure successful implementation.
 Data is crucial: Myntra's AI initiatives relied heavily on high-quality data, which was used to
train models and improve accuracy.
 Collaboration is vital: Myntra's AI transformation involved collaboration between various
stakeholders, including data scientists, engineers, and business leaders.

3. Lenskart’s AI Powered Eyewear Recommendation

Lenskart, India's leading online eyewear retailer,

wanted to enhance its customer experience by
providing personalized eyewear
recommendations. To achieve this, Lenskart
leveraged artificial intelligence (AI) to
develop an AI-powered eyewear
recommendation engine.

Challenges

 Manual recommendation process: Lenskart's traditional recommendation process relied on

manual input from stylists, which was time-consuming and prone to errors.
 Limited product visibility: With a vast collection of eyewear products, customers found it
challenging to discover suitable frames.
 Inaccurate recommendations: Manual recommendations often resulted in inaccurate
suggestions, leading to customer dissatisfaction.

Solution

Lenskart developed an AI-powered eyewear recommendation engine that used machine learning
algorithms to analyze customer data, including:

23
  Face shape and size: AI-powered face analysis to determine the customer's face shape and
size.
 Personal style: Analysis of customer preferences, such as frame style, color, and material.
 Purchase history: Examination of customer purchase history to identify patterns and
preferences.

The AI engine provided personalized eyewear recommendations, considering factors such as:

 Frame compatibility: Suggested frames that suited the customer's face shape, size, and
personal style.
 Lens compatibility: Recommended lenses that matched the customer's prescription and frame
choice.

Results and Benefits:

 Improved customer satisfaction: AI-powered recommendations increased customer

satisfaction by 25%.
 Increased conversion rates: Personalized recommendations led to a 30% increase in
conversion rates.
 Reduced returns: Accurate recommendations resulted in a 20% decrease in returns.
 Enhanced customer experience: AI-powered recommendations provided a unique and
personalized shopping experience, setting Lenskart apart from competitors.

4. Zomato's AI-Powered Customer Support Platform: Nugget

Zomato, a leading food delivery and

restaurant discovery platform, has launched
an AI-powered customer support platform
called Nugget. Developed in partnership with
the Boston Institute of Analytics, Nugget
aims to provide personalized and efficient
customer support.

24
Key Features of Nugget:

 AI-powered chatbots: Nugget uses machine learning algorithms to power chatbots that can
understand customer queries and provide personalized responses.
 Natural Language Processing (NLP): Nugget's NLP capabilities enable it to understand the
nuances of human language, allowing it to provide more accurate and empathetic responses.
 Sentiment analysis: Nugget can analyze customer sentiment and emotions, enabling it to
provide more personalized and effective support.
 Integration with Zomato’s platform: Nugget is integrated with Zomato's platform, allowing it
to access customer order history and preferences.

Benefits of Nugget:

 Improved customer satisfaction: Nugget's AI-powered chatbots and NLP capabilities enable
it to provide personalized and efficient customer support, leading to improved customer
satisfaction.
 Reduced support queries: Nugget's ability to provide accurate and effective responses reduces
the number of support queries, freeing up human customer support agents to focus on more
complex issues.
 Increased efficiency: Nugget's automation capabilities enable it to handle a large volume of
customer support queries, increasing efficiency and reducing response times.
 Enhanced customer experience: Nugget's personalized and empathetic responses enhance the
overall customer experience, leading to increased loyalty and retention.

5. Nykaa’s AI Powered User Experience

Nykaa, India's leading beauty and wellness E-

Commerce platform, is leveraging artificial intelligence
(AI) to transform the user experience.

25
AI-Powered Personalization

 Product recommendations: Nykaa's AI engine analyzes user behavior, preferences, and

purchase history to offer personalized product recommendations.
 Content curation: AI-powered content curation provides users with relevant and engaging
content, such as beauty tips, tutorials, and product reviews.

AI-Driven Virtual Try-On

 Augmented reality (AR) technology: Nykaa's virtual try-on feature uses AR technology to
allow users to try on products virtually.
 AI-powered skin analysis: The platform's AI engine analyzes users' skin types, tones, and
concerns to provide personalized product recommendations.

AI-Enabled Customer Service

 Chatbots: Nykaa's AI-powered chatbots provide 24/7 customer support, answering queries
and resolving issues.
 Sentiment analysis: AI-powered sentiment analysis helps Nykaa's customer service team to
identify and address user concerns.

Benefits

 Enhanced user experience: AI-powered personalization, virtual try-on, and customer service
have significantly improved the user experience.
 Increased engagement: Nykaa's AI-driven content curation and product recommendations
have increased user engagement and conversion rates.
 Improved customer satisfaction: AI-enabled customer service has reduced response times and
improved customer satisfaction.

26
 2.4 : INTERNATIONAL SCENARIO

1) Amazon Uses AI to Dominate E – commerce

Amazon is a master at leveraging customer-centric

innovation to propel its growth. The company has
taken its business to the next level by building the
organization around artificial intelligence (AI) and
machine learning (ML). Today a trillion-dollar
company, Amazon has reorganized itself over the
years to integrate AI in every part of the organization
.It won’t be far-fetched to say that AI has played a big
part in making Amazon the biggest ecommerce player
in the world, and it will continue doing so.

a. Product Recommendations

How it works

Amazon's recommendation engine uses a combination of natural language processing (NLP),

collaborative filtering, and matrix factorization to analyze user behavior, search history, and
purchase patterns. The engine generates a unique user profile, which is then matched with product
features and attributes to provide personalized recommendations.

Techniques used

 Collaborative Filtering: Identifies patterns in user behavior and preferences to recommend

products.
 Content-Based Filtering: Recommends products based on their attributes and features.
 Hybrid Approach: Combines multiple techniques to provide more accurate recommendations.

Benefits

 Increased average order value: Personalized recommendations encourage customers to

purchase more.
 Improved customer satisfaction: Relevant recommendations enhance the overall shopping
experience.

27
  Increased customer loyalty: Personalized interactions foster loyalty and retention.

b. Predictive Analytics

How it works

Amazon's predictive analytics platform uses machine learning algorithms to analyze historical sales data,
seasonal trends, and external factors like weather and holidays. The platform generates predictive
models that forecast demand for products, enabling Amazon to optimize inventory levels and supply
chain operations.

Techniques used

 Time Series Analysis: Analyzes historical sales data to identify patterns and trends.
 Regression Analysis: Identifies relationships between variables to predict demand.
 Machine Learning Algorithms: Trains predictive models using large datasets and complex
algorithms.

Benefits

 Improved demand forecasting: Accurate predictions enable Amazon to optimize inventory

levels and reduce stockouts.
 Reduced inventory costs: Optimized inventory levels reduce storage and handling costs.
 Increased supply chain efficiency: Predictive analytics enables Amazon to optimize shipping
routes and schedules.

c. Price Optimization

How it works

Amazon's price optimization algorithm uses machine learning to analyze demand, competition, and
profit margins in real-time. The algorithm adjusts prices dynamically to maximize revenue and stay
competitive.

Techniques used

 Dynamic Pricing: Adjusts prices in real-time based on demand and competition.

28
  Machine Learning Algorithms: Analyzes large datasets to identify patterns and optimize
prices.
 Game Theory: Analyzes competitor pricing strategies to inform Amazon's pricing decisions.

Benefits

 Increased revenue: Dynamic pricing maximizes revenue by adjusting prices to reflect

demand.
 Improved competitiveness: Real-time price adjustments enable Amazon to stay competitive
in the market.
 Enhanced customer satisfaction: Competitive pricing enhances the overall shopping
experience.

2) Sephora: Personalizing Beauty Shopping

Sephora's Virtual Artist is an AI-powered virtual

try-on tool that uses augmented reality (AR)
to let you see how different makeup products
and looks would look on your face. It allows
you to try on various lip shades, eye shadows,
and false eyelashes virtually. The tool
provides a realistic and personalized
experience, helping you find the perfect look
and products. It's available on Sephora's app
and website, making it easy to try before you
buy from the comfort of your own home.

Key Takeaways

 AI-Powered Recommendations: Sephora's AI algorithm analyzes customer data, including

purchase history, search queries, and product interactions, to provide personalized product
recommendations.
 Real-Time Personalization: Sephora's AI system can generate highly targeted
recommendations in real-time, enabling customers to discover new products and brands.

29
  Virtual Assistant: Sephora's virtual assistant, powered by AI, provides customers with
personalized advice and guidance, simulating the experience of shopping with a
knowledgeable beauty expert.
 Content Generation: Sephora's AI system can generate high-quality content, such as product
descriptions and reviews, to enhance the online shopping experience.

Benefits

 Enhanced Customer Experience: AI-powered personalization enables Sephora to provide

customers with relevant and engaging experiences, increasing loyalty and satisfaction.
 Increased Sales: Targeted recommendations and personalized content drive sales by
introducing customers to new products and brands.
 Competitive Advantage: Sephora's AI-powered approach to personalization sets the company
apart from competitors, establishing it as a leader in the beauty retail industry.

Technologies Used

 Machine Learning: Sephora's AI algorithm employs machine learning techniques to analyze

customer data and generate personalized recommendations.
 Natural Language Processing (NLP): Sephora's virtual assistant uses NLP to understand and
respond to customer queries.
 Content Generation: Sephora's AI system uses content generation techniques to produce high-
quality product descriptions and reviews.

3) Walmart's AI-Powered Inventory System

Walmart's AI Inventory System uses artificial

intelligence and machine learning to optimize
inventory management. It analyzes sales data,
seasonal trends, and supply chain factors to
predict demand and adjust inventory levels. This
reduces stock outs and overstocking, ensuring
products are available when needed. The system
continuously learns and adapts to changes,
improving efficiency, reducing costs, and
enhancing the shopping experience.

30
Challenge

 Inaccurate Demand Forecasting: Walmart struggled to accurately predict demand for

products, leading to stockouts and overstocking.
 Inefficient Inventory Management: Manual inventory management processes were time-
consuming and prone to errors.
 Waste and Excess Inventory: Inaccurate forecasting and inefficient inventory management
led to waste and excess inventory.

Solution

 AI-Powered Inventory System: Walmart implemented an AI-powered inventory system that

analyzes historical data, including past sales, online searches, and page views.
 Machine Learning Algorithms: The system uses machine learning algorithms to identify
patterns and trends, and predict demand.
 Real-Time Data Analysis: The system analyzes real-time data, including weather patterns,
economic trends, and local demographics.

Result

 Improved Demand Forecasting: Walmart's AI-powered inventory system improved demand

forecasting accuracy, reducing stockouts and overstocking.
 Increased Efficiency: Automated inventory management processes reduced manual errors
and increased efficiency.
 Reduced Waste: Accurate demand forecasting and efficient inventory management reduced
waste and excess inventory.

Benefits

 Increased Customer Satisfaction: Improved demand forecasting and inventory management

ensured that products were available when customers needed them.
 Reduced Costs: Automated inventory management processes and reduced waste saved
Walmart millions of dollars.
 Competitive Advantage: Walmart's AI-powered inventory system provided a competitive
advantage, enabling the company to respond quickly to changing demand patterns.
 Improved Supply Chain Efficiency: The system optimized inventory levels and reduced
transportation costs, improving supply chain efficiency.

31
4) eBay: Leveraging AI for Search and Personalization

eBay is revolutionizing the online shopping experience

with its strategic use of artificial intelligence (AI) for
search and personalization.

Enhanced Search Experience

 Image Search: eBay's AI-powered image search allows buyers to use pictures to search for
items, making it easier to find what they're looking for ¹.
 Contextual Understanding: AI helps eBay understand the context of a search, providing a full
spectrum of relevant products.

Personalization

 Interests: eBay's Interests feature allows buyers to personalize their shopping experience
based on their passions and styles .
 Trending in Your Interests: eBay's AI-powered trending feature shows buyers what's
currently popular in their areas of interest.
 Personalized Recommendations: eBay's AI-driven recommendation system suggests items
based on a buyer's browsing and purchasing history.

Seller Empowerment

 AI-Powered Tools: eBay provides sellers with AI-powered tools to help them optimize their
listings, prices, and inventory management.
 Machine Translation: eBay's machine translation capabilities enable sellers to reach a global
audience, breaking language barriers.

Future Developments

 Deep Learning: eBay is exploring the potential of deep learning to further enhance the
shopping experience and improve operational efficiency.
 Visual Shopping: eBay's visual shopping feature allows buyers to use images to discover and
explore similar items.

32
5) Alibaba Makes AI Model for Video and Image Generation Publicly

Alibaba has made its AI model for video and

image generation publicly available, allowing
developers to generate high-quality images and
videos using text prompts.

Key Features

 Text-to-Image Synthesis: The AI model can generate high-quality images from text prompts.
 Text-to-Video Synthesis: The model can also generate videos from text prompts.
 Customization: Developers can customize the model to generate images and videos based on
specific styles or attributes.

Benefits

 Increased Efficiency: The AI model can automate the process of generating images and
videos, saving time and effort.
 Improved Quality: The model can generate high-quality images and videos that are
comparable to those created by humans.
 New Use Cases: The model can enable new use cases such as generating personalized
product images and videos for ecommerce platforms.

Availability

 Open-Source: The AI model is available as an open-source project on GitHub.

 Cloud Services: Alibaba's cloud services will also provide access to the model through its AI
platform.

33
 CHAPTER 3

DATA FINDING AND ANALYSIS

34
 DATA ANALYSIS AND INTERPRETATION

This chapter aims obtain the objective of the study by critically analysing the qualitative data through
thoroughly examining the interviewee’s responses and beliefs. This has been achieved through
evaluating the most relevant responses by the participants. The data has been analysed and discussed
by comparing the comments made by the respondents with the literature review keeping in mind the
research objective of the study. Thus, the rationale of this analysis is based on the personal answers
provided by the respondents.

An appropriately designed questionnaire was used to collect the primary data for the study. The data
for 130 respondents was organized systematically in tables and graphs and then was subjected to
analysis using appropriate statistical tools. The results of the analysis are presented in the following
section in order to assess the customer perception towards “Impact of A.I. in E-Commerce “

Here for analysing, we are considering Five Factors. That is:

1. Demographic Factor
2. Introduction to AI in E-Commerce
3. AI Powered Feature in E-Commerce
4. Benefits and Challenges in E-Commerce
5. Future of AI in E-Commerce

35
 1. DEMOGRAPHIC FACTOR

1.1 : Gender of Respondents

Responses Percentage
Male 40 31%
Female 90 69%
TABLE 1.1

GENDER

31%

MALE
69% FEMALE

GRAPH 1.1

Analysis and Interpretation

According to demography profile, in this study 31% male and 69% female respondents are part of my
target population and they help me to fulfil my questionnaire. From these groups total respondents
are 130. This indicates that female are more aware of AI in E-Commerce than male.

36
1.2 : Age of Respondents

Responses Percentage
Below 18 3 2%
18 – 25 121 93%
25 – 40 6 5%
Above 40 0 0%
TABLE 1.2

AGE

5% 0%2%

Below 18
18 - 25
25 - 40
93% Above 40

GRAPH 1.2

Analysis and Interpretation

Above data shows that 2% respondents are below 18 years old, 93% respondents are between 18-25
years old, 5% respondents between 25-40 years old, and 0% respondents are Above 40. People
who mainly responded were from the age group of Above 18 to 25, this range of people are quite
active in the survey and they regularly do shopping and are aware of AI in E-Commerce. The
extreme age groups like those below 18 and above 40 are less in number in this regard or maybe
they didn't show the same interest as the major range of people.

37
1.3 : Education Qualification of Respondents

Responses Percentage
High School or Equivalent 21 16%
Under Graduate 88 68%
Post Graduate 16 12%
Professional 5 4%
TABLE 1.3

EDUCATION QUALIFICATION

4%

12% 16%
High School or Equivalent
Under Graduate
Post Graduate
68%
Professional

GRAPH 1.3

Analysis and Interpretation

Above data shows that 68% respondents are from Under Graduate, 16% respondents are from
High School or Equivalents, 12% respondents are from Post Graduate and 4% are from
professional. People who mainly responded are from undergraduate and from high school.

38
1.4 : Occupation of Respondents

Responses Percentage
Student 118 91%
Employed 11 8%
Business Person 1 1%
Homemaker 0 0%

TABLE 1.4

Occupation
1% 0%
8%

Student
Employed
Business Person
Homemake

91%

GRAPH 1.4

Analysis and Interpretation

Above data shows that 91% respondents are students, 8% respondents are employed, 1% is
Business person. As the graph portrays, students were mainly engaged in this survey, maybe
because I am a student, therefore my acquaintances were really coming forward with their opinion.
Employed % and Business person % comparatively lower than the students

39
 2. INTRODUCTION TO AI IN E-COMMERCE

2.1 : How familiar are you with AI powered E-Commerce platforms?

Responses Percentage
Very familiar 37 29%
Somewhat familiar 81 62%
Not very familiar 12 9%
Not at all familiar 0 0%
TABLE 2.1

How familiar are you with AI powered E-

Commerce platforms?

0%
9%
29%

Very familiar
Somewhat familiar
Not very familiar
62%
Not at all familiar

Graph 2.1

Analysis and Interpretation

Above data shows that 29% respondents are familiar to AI in E-Commerce, 62% respondents are
somewhat familiar to AI in E-Commerce, 9% respondents are not very familiar to AI in E-
Commerce. This data also says that mostly people are familiar to AI.

40
2.2 : Have you ever used an AI powered E-Commerce platforms?

Responses Percentage
Yes 105 81%
No 25 19%
TABLE 2.2

Have you ever used an AI powered E-

Commerce platforms?

19%

Yes

No
81%

GRAPH 2.2

Analysis and Interpretation

Above data shows that mostly people have used AI in E-Commerce platforms, about 81%
respondents have used AI in E-Commerce platforms and about 19% respondents have not used AI
in E-Commerce platforms.

41
2.3 : How important is it for you to have AI powered features while shopping
online?

Responses Percentage
Very important 31 24%
Somewhat important 72 55%
Not very important 26 20%
Not at all important 1 1%
TABLE 2.3

How important is it for you to have AI

powered features while shopping online?
1%

20% 24%

Very Important
Somewhat Important
Not Very Imporatant

55% Not at all Important

GRAPH 2.3

Analysis and Interpretation

Above data shows that about 55% respondents says that AI features while shopping online are
somewhat important, 24% respondents says that AI feature is very important, 20% respondents
says that AI feature is not very important and for about 1% respondents says AI feature is not at
all important.

42
 3. AI POWERED FEATURES IN E-COMMERCE

3.1 : Which of the following AI powered features do you think are most useful in
E-Commerce?

Responses Percentage
Image recognition 49 22.5%
Virtual Assistants 58 26%
Chatbots 53 22.5%
Product recommendations 65 29%
TABLE 3.1

Which of the following AI powered features do you think

are most useful in E-Commerce?

Image Recognition

Viratual Assistants

Chatbots

Product Recommendations

0 10 20 30 40 50 60 70

GRAPH 3.1

Analysis and Interpretation

Above data shows that about 29% respondents feels that product recommendations feature of AI in E-
Commerce is most useful, 26% respondents feels that virtual assistants feature of AI in E-Commerce are also
useful and lastly about 22.5% respondents chatbots and Image recognition is least useful feature in AI in E-
Commerce according to my survey.

43
3.2 : How helpful do you find AI powered product recommendations in making
purchase decision?

Responses Percentage
Yes, significantly 38 29%
Yes, Somewhat 73 57%
No, not really 17 13%
No, not at all 2 1%
TABLE 3.2

Do AI generated product recommendations increase

your confidence in making online purchases?

1%
13%
29%
Yes, significantly
Yes, somewhat
No, not really
57% No, not at all

GRAPH 3.2

Analysis and Interpretation

Above data shows that product recommendations feature in making online purchases, about 57%
respondents feels that it somewhat add confidence to their online purchases, about 29% respondents feels
that it significantly helps them for online purchases, about 13% respondents feels that it doesn’t effects
anything for online purchases and about 1% respondents thinks not at all helps in confidence for their
online purchases.

44
3.3 : How do you think AI powered virtual assistants can improve your online
shopping experience?

Responses Percentage
By providing quick responses to queries 53 41%
By offering personalized product recommendations 48 37%
By helping with order tracking and returns 14 11%
By providing detailed product information 15 11%

TABLE 3.3

How do you think AI powered virtual assistants

can improve your online shopping experience?
60

50

40

30

20

10

0
By providing quick BY offering By helping with order By providing detailed
responses to queries personalized product tracking and returns product information
recommendations

GRAPH 3.3

Analysis and Interpretation

Above data shows that 41% respondents feels that by providing quick responses to queries can
improve the shopping experience of the customers, 37% respondents feels that by offering
personalized product recommendations can improve shopping experience and 11% respondents
feels that by helping with order tracking and returns and providing detailed product
information can make shopping experiences better.

45
 4. BENEFITS AND CHALLENGES OF AI IN E-COMMERCE

4.1 : What benefits do you think AI can bring to E-Commerce industry?

Responses Percentage
Improved customer experience 84 35%
Increased efficiency 78 35%
Enhanced detection 31 13%
Improved supply chain management 39 17%
TABLE 4.1

What benefits do you think AI can bring to E-

Commerce industry?
90
80
70
60
50
40
30
20
10
0
Improved customer Increased efficiency Enhanced detection Improved supply chain
experience management

GRAPH 4.1

Analysis and Interpretation

Above data shows that mostly about 35% respondents thinks that improved customer experience and
increased efficiency benefits have been done by bring AI in E-Commerce, 17% respondents feels that AI has
bought improved supply chain management in E-Commerce and rest 13% respondents feels enhanced
detection have been done by bringing AI in E-Commerce.

46
4.2 What challenges do you think AI can pose to the E-Commerce industry?

Responses Percentage
Job displacement 64 31%
Bias in decision making 29 15%
Dependence on technology 79 38%
Lack of people giving efforts for their work 33 15%
Lack of transparency 1 1%
TABLE 4.2

What challenges do you think AI can pose to the

E-Commerce industry?
90
80
70
60
50
40
30
20
10
0
Job displacement Bias in decision Dependence on Lack of people Lack of
making technology giving efforts for transparency
their work

GRAPH 4.2

Analysis and Interpretation

Above data shows that, mostly the challenge that people face due to AI in E-Commerce industry is
that dependence on technology is too much for about 38% respondents feels this, 31% respondents
says that AI has bought job displacement for the people due to the automation of the AI, 15%
respondents feels that AI can be bias in decision making and lack of transparency and lastly 1%
respondents feels due to AI lack of people giving efforts for their work.

47
4.3 : How much satisfies are you to have AI powered recommendations while
shopping online?

Responses Percentage
Very satisfied 10 8%
Satisfied 59 45%
Neutral 59 45%
Dissatisfied 2 2%
Very dissatisfied 0 0%
TABLE 4.3

How much satisfies are you to have AI powered

recommendations while shopping online?

2% 0%

8%
Very satisfied

Satisfied

Neutral
45%
Dissatisfied

45% Very dissatisfied

GRAPH 4.3

Analysis and Interpretation

Above data shows that, 45% respondents feels that AI powered recommendations while shopping online are
satisfying and at same time it may be satisfied or dissatisfied, about 8% respondents feels that it is very
satisfied while shopping online and for about 2% respondents says that it is dissatisfying.

48
4.4 : Do you think AI makes online shopping more convenient?

Responses Percentage
Yes, significantly 49 38%
Yes, but only slightly 70 54%
No, it does not make much difference 11 8%
No, it makes it worse 0 0%
TABLE 4.4

Do you think AI makes online shopping more

convenient?

0%
8%
Yes, significantly
38%
Yes, but only slightly

54% No, it does not make much

difference
No, it makes it worse

GRAPH 4.4

Analysis and Interpretation

Above data shows that, 54% respondents says that AI makes online shopping convenient but
slightly, 38% respondents feels that AI makes significantly convenient, 8% respondents says that
AI does not make much difference in convenience of online shopping, and lastly AI always helps
and are convenient in online shopping it does not make it worse.

49
4.5 : What do you think is the most significance challenge in facing the adoption of AI powered
E-Commerce platforms?

Responses Percentage
AI sometimes doesn’t understand the problem 1 1%
Regulatory issues 23 12%
Lack of expertise 46 23.5%
Data quality issues 46 23.5%
Technical issues 77 40%
TABLE 4.5

What do you think is the most significance

challenge in facing the adoption of AI powered E-
Commerce platforms?

AI sometimes doesn't understant the problem

Regulatory issues

Lack of expertise

Data quality issues

Technical issues

0 10 20 30 40 50 60 70 80 90

GRAPH 4.5

Analysis and Interpretation

Above data shows that, most of the respondents (40%) feels that most significance challenge while adoption
of AI in E-Commerce is the technical issues faced in these platforms, 23.5% respondents feels that
sometimes lack of expertise and data quality issues are also the challenges while adoption of AI, 12%
respondents feels that regulatory issues are also a challenge and lastly 1% respondents feels that AI
sometimes doesn’t understand the problem as they are not human.

50
 5. FUTURE OF AI IN E-COMMERCE

5.1 : How do you think AI will continue to shape the E-Commerce industry?

Responses Percentage
Increased use of automation 54 42%
Improved customer experience 44 34%
Increased competition 20 15%
Job displacement 12 9%
TABLE 5.1

How do you think AI will continue to shape

the E-Commerce industry?

9%
15% 42%
Increased use of automation
Improved customer experience
Increased competition
34% Job displacement

GRAPH 5.1

Analysis and Interpretation

Above data shows that, 42% respondents feels that in future due to AI automation in E-Commerce
industry will increase, 34% respondents feels that AI will improve customer experience, 15%
respondents feels that use of AI in E-Commerce industry can bring competition in future and 9%
respondents says that in future AI will be used more and for that reason job displacement will take
place.

51
5.2 : What AI powered features would you like to see more of in E-Commerce?

Responses Percentage
Virtual try on 44 34%
Personalized product recommendations 41 32%
Chatbots with human like conversation 29 22%
Augmented reality experiences 16 12%
TABLE 5.2

What AI powered features would you like to

see more of in E-Commerce?

12% Virtual try on

34%
22% Personalized product
recommendations
Chatbots with human like
32% conversation
Augmented reality experiences

GRAPH 5.2

Analysis and Interpretation

Above data shows that, 34% respondents feels that virtual try on features is required in future the
most (For eg: In Lenskart this feature may help them in buying lens and frames), 32% respondents
feels that personalized product recommendation features is required in future, 22% respondents
feels that chats bots with human like conversation feature is required in future as this may help in
customer experience while doing enquires for product or if they want to raise any complain, and
lastly 12% feels that Augmented Reality experiences feature is required in future.

52
5.3 : How important do you think it is for E-Commerce platforms to invest in AI
research and development?

Responses Percentage
Very important 44 34%
Somewhat important 77 59%
Not very important 8 6%
Not at all important 1 1%
TABLE 5.3

How important do you think it is for E-

Commerce platforms to invest in AI research
and development ?
1%
6%
34%
Very important
Somewhat important

59% Not very important

Not at all Important

GRAPH 5.3

Analysis and Interpretation

Above data shows that, more than 50% respondents feels that investment in AI is required as AI is being
growing and in all industry AI is being used, 34% respondents feels that investment in AI is very important,
6% respondents feels that investment in AI is not very important and 1% respondents feels that investment
in AI is not at all important.

53
 Chapter 4

CONCLUSION AND RECOMMENDATION

54
4.1 : Conclusion
The impact of Artificial Intelligence (AI) on E-Commerce has been profound, transforming the way
businesses operate and interact with customers. AI-powered chatbots and virtual assistants provide
personalized support, improving customer satisfaction and loyalty. AI-driven algorithms analyze
customer behavior, offering tailored product suggestions and increasing average order value.

AI has also streamlined E-Commerce operations, automating tasks such as inventory management,
order processing, and logistics. This has reduced costs, improved efficiency, and enabled businesses
to scale more effectively. Additionally, AI provides valuable insights through data analysis, enabling
businesses to make informed decisions and stay competitive.

However, the increasing reliance on AI also raises concerns. Job displacement is a significant issue,
as automation replaces human workers in sectors such as customer support and data entry. AI
algorithms can also perpetuate biases and lack transparency, potentially leading to unfair treatment of
customers. Furthermore, AI-powered systems can be vulnerable to cyber attacks , compromising
customer data and trust.

To mitigate these risks, businesses must prioritize transparency, ethics, and human-AI collaboration.
This includes developing AI systems that are explainable, fair, and secure. By addressing these
challenges, businesses can harness the power of AI to drive growth, innovation, and customer
satisfaction, while minimizing its negative consequences.

55
4.2 : Recommendation
I. For Businesses
 Implement AI-powered chatbots to provide 24/7 customer support
 Use AI-driven personalization to offer customers relevant products and services
 Invest in employee retraining and upskilling programs to work effectively with AI
 Develop AI systems that are explainable, fair, and secure
II. For Customers
 Be aware of AI-powered pricing strategies and compare prices
 Use AI-powered product recommendations to discover new products
 Take advantage of AI-powered customer support for quick and personalized help
 Be cautious of AI-powered scams and phishing attacks
III. For Developers
 Develop AI systems that are transparent, explainable, and fair
 Use AI-powered testing and quality assurance tools
 Stay up-to-date with the latest AI technologies and trends
 Develop AI systems that are secure and protect customer data
IV. For E-Commerce Platforms
 Integrate AI-powered chatbots and virtual assistants
 Offer AI-powered personalization and product recommendations
 Provide AI-powered predictive analytics and insights
 Ensure AI-powered systems are secure and protect customer data
V. For Supply Chain Management
 Use AI-powered predictive analytics to forecast demand and optimize inventory
 Implement AI-powered automation for inventory management and logistics
 Use AI-powered data analysis to identify supply chain inefficiencies
 Develop AI-powered contingency planning for supply chain disruptions

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Annexure-1.4

Bibliography

Websites

 https://www.financialexpress.com/business/brandwagon-how-ai-is-transforming-E-
Commerce-with-smarter-delivery-and-marketing-cost-solutions- 3686840/#:~:text=AI%20is
%20revolutionising%20customer%20acquisition,round%2Dthe% 2Dclock%20assistance.
 https://www.forrester.com/report/case-study-myntra-embraced-artificial-intelligence-to-
transform-its-business-model/RES143936
 https://bostoninstituteofanalytics.org/blog/zomato-launches-ai-powered-customer-support-
platform-nugget/
 https://www.linkedin.com/pulse/how-nykaa-using-ai-upscale-user-experience-store
 https://www.linkedin.com/pulse/beauty-algorithm-how-sephora-using-ai-personalize-your-
ari-massoudi- 2sp1e#:~:text=Implementing%20AI%20for%20Real%2DTime,can%20generate
%20highly% 20targeted%20recommendations.
 https://tech.walmart.com/content/walmart-global-tech/en_us/blog/post/walmarts-ai-powered-
inventory-system-brightens-the-holidays.html
 https://bernardmarr.com/the-amazing-ways-ebay-is-using-artificial-intelligence-to-boost-
business-success/
 https://economictimes.indiatimes.com/tech/artificial-intelligence/alibaba-makes-ai-model-for-
video-image-generation-publicly- available/articleshow/118570713.cms?
UTM_Source=Google_Newsstand&UTM_Campaign
=RSS_Feed&UTM_Medium=Referral&from=mdr

Journals

 “Lenskart's AI-Powered Eyewear Recommendation Engine" by McKinsey & Company"

 "Amazon's AI-Powered Ecommerce Strategies" by Towards Data Science
 “Explainable AI In E-Commerce: Enhancing Trust And Transparency In AI-Driven
Decisions” by Malay Sarkar, Md Hasan Or Rashid, Md Refadul Hoque, Md Rakib Mahmud
 Elevating logistics performance: harnessing the power of artificial intelligence in E-
Commerce” by Gunjan Malhotra, Manjeet Kharub.

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 Annexure-1.5

Questionnaire

Impact of Artificial Intelligence on E-Commerce

Hello! I am Puneet Kumar Agarwal, a third year B.Com (Honours) student at The Bhawanipur
Education Society College, Kolkata.

This short survey aims to understand the “ Impact of Artificial Intelligence (AI) on E-Commerce”
from your perspective. As E- Commerce continues to evolve, AI is playing an increasingly important
role in shaping the online shopping experience. Your responses will help us better understand the
benefits and challenges of AI-powered e-commerce platforms.

* Indicates required question

1. Email *

SECTION 1: DEMOGRAPHIC
2. Gender *
o Male

o Female

o Others:
3. Age *
o Below 18

o 18 – 25

o 25 – 40

o Above 40
4. Education Qualifications *
o High school or equivalent

o Under Graduate

o Post Graduate

o Professional
5. Occupation *
o Students

o Employed

o Homemaker

o Others:

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Section 2: Introduction to A.I in E-commerce
6. How familiar are you with AI powered e-commerce platforms? *
o Very familiar

o Somewhat familiar

o Not very familiar

o Not at all familiar

7. Have you ever used an AI powered e-commerce platforms? *
o Yes

o No
8. How important is it for you to have AI powered features while shopping online? *
o Very important

o Somewhat important

o Not very important

o Not at all important

Section 3: AI powered features in E-Commerce

9. Which of the following AI powered features do you think are most useful in E-Commerce? *
Product recommendations
Chatbots
Virtual assistants
Image recognition
Others:
10. Do AI generated product recommendations increase your confidence in making online
purchases? *
o Yes, significantly

o Yes, somewhat

o No, not really

o No, not at all

11. How do you think AI powered virtual assistants can improve your online shopping
experience? *
o By providing quick responses to queries

o By offering personalized product recommendations

o By helping with order tracking and returns

o By providing detailed product information

Section 4: Benefits and Challenges of AI in E-Commerce

12. What benefits do you think AI can bring to the E-Commerce industry? *
Improved customer experience
Increased efficiency
Enhanced detection
Improved supply chain management
Others:

59
 13. What challenges do you think AI can pose to the E-Commerce industry? *
Job displacement
Bias in decision making
Dependence on technology
Lack of transparency
Others:
14. How much satisfied are you with AI powered recommendations when shopping online? *
o Very satisfied

o Satisfied

o Neutral

o Dissatisfied

o Very satisfied
15. Do you think AI makes online shopping more convenient? *
o Yes, significantly

o Yes, but only sligtly

o No, it does not make much difference

o No, it makes it worse

16. What do you think is the most significant challenge in facing the adoption of AI
powered e-commerce platforms? *
Technical issues
Data quality issues
Lack of expertise
Regulatory issues
AI sometimes doesn't understand the problem

Section 5: Future of AI in E-Commerce

17. How do you think AI will continue to shape the E-Commerce industry? *
o Increased use of automation

o Improved customer experience

o Increased competition

o Job displacement
18. What AI powered features would you like to see more of in e-commerce? *
o Virtual try on

o Personalized product recommendations

o Chatbots with human like conversation

o Augmented reality experiences

19. How important do you think it is for e-commerce platforms to invest in AI research and
development? *
o Very important

o Somewhat important

o Not very important

o Not at all important

20. Any additional comments or concerns about AI in E-Commerce?
60