Flipkart’s Investment in AI was needed: It will Redefine Retail Industry in India

by December 24, 2017

In a constant tug of war for e-commerce market share in India, Flipkart has reportedly trounced its biggest rival Amazon this year, during the biggest sales battle of the year. After a blip in the growth of Flipkart last year, several global investors had written-off the company’s growth story. However, Flipkart has bounced back with huge investment from Japan’s SoftBank Vision Fund and has made a promising comeback this year with more insightful business strategies. Now Flipkart is turning to AI for deeper insights by carving out a separate AI unit called AIforIndia. The new AI unit will allow the company to mine its consumer data more effectively and strengthen the business strategies.


The Need for a Special AI Unit

Flipkart co-founder and Chairman Sachin Bansal mentioned in an interview that the company will invest “hundreds of millions of dollars” in AI technology over the next few years. This indicates the magnitude of the need for AI in businesses. The following reasons explain why Flipkart is investing this huge amount in AI.


1. Potential of AI and First-Mover Advantage

The potential that AI holds for future is unarguably huge. It can drastically transform the way businesses are conducted in India. As AI gets more applied in mainstream commercial businesses, the first-mover in this field that properly harnesses the technology could reap all the advantages. It can steer the course of the upcoming information age and control the tech industry for years. Moreover, according to Bansal, traditional methods and practices are still a norm in India. The use of advanced technology is scarce and scattered. So, application of AI can boost up productivity and efficiency rapidly.

2. To Stay in the Race and Fight Back

Amazon, the world’s largest online retailer, has invested heavily in AI to incorporate it in every aspect and improve efficiency in solutions. With Amazon’s long-term growth strategy and global presence, it will be difficult to completely topple over Amazon, but with AI, Flipkart will have a definite advantage. AI will give Flipkart an edge over Amazon. So, to stay in the race and put up a fight, incorporating AI is imperative in this age.

3.  Unique Problems for India

Though the applications of AI are generally same across countries, India has some issues and demographics which are unique on its own. Globally tested models may not yield equivalent success stories in a developing country like India. Over the years, Flipkart has spent vast resources to understand the nuances of a typical Indian customer behavior to give specific and unique individual solutions. With AI, such consumer data can be effectively put to use. Moreover, the e-commerce market in India is estimated to touch US$100 billion by 2020.


How Can AI Potentially Transform the Retail Industry in India?

Over the years, AI will become a significant driving force of businesses which will change the way businesses are conducted in India. AI can offer a lot in the e-commerce market. Application of AI is huge and covers a wide array of possibilities including both consumer side and supply side.


Consumer Side

AI can change the way Flipkart interacts or talks with its customers. From customer support to active customer management, everything can be made more efficiently. Technologies such as image recognition, speech recognition, and text recognition will help customers to find the right products. Product discovery will also become easier. With natural language processing and interactive chatbots, customers will have personalized individual recommendations. Customer service can be rapidly improved. With automation, the burden on customer service representatives will also decrease. So, AI can help by giving the existing customers better insights and also by helping in customer acquisition.

Supply Side

With AI, problems pertaining to inventory management and supply logistics can be solved. Warehousing and marketing channels will be more proficient. From procurement to deliveries, AIforIndia unit will attempt to find a solution for all the problems.

The AIforIndia team will be led by chief data scientist Mayur Datar with Sachin Bansal and CEO Kalyan Krishnamurthy directly supervising some key projects.



Flipkart has already hired many AI specialist and professionals by forging partnerships with top educational institutes from India. The company is leaving no stone unturned to build the necessary infrastructure required to incorporate AI. The new unit, AIForIndia, puts Flipkart in a better position to mine consumer data and make informed