AI in E-commerce Market by Technology (ML, NLP, Computer Vision), Business Model, Deployment Mode, Product Offering (Beauty & Fashion, Pharmaceutical, Electronic), End User (B2B, B2C), and Geography - Global Forecast to 2031

The AI in E-commerce Market is projected to reach $11.1 billion by 2031, at a CAGR of 17.8% from 2024 to 2031. 

AI in E-commerce Market Size & Forecast

The growth of the AI in e-commerce market is attributed to the increasing need for customer retention in the e-commerce industry, growing usage of social media and social commerce, rising penetration of the internet and smartphones, and increasing need to improve and automate inventory management systems. However, the high initial investment restrains the market’s growth.

Moreover, the increasing penetration of voice recognition technology offers significant opportunities for the growth of the global AI in e-commerce market. However, data privacy concerns and a lack of skilled labor pose a challenge to the market's growth.

Increasing Penetration of Speech & Voice Recognition Technology Offer Growth of the Global AI in E-commerce Market

Speech & Voice recognition technology is increasingly being used in various sectors such as BFSI, e-commerce, healthcare, and education sectors. AI and ML-enabled speech recognition technology convert spoken language into text. The technology uses machine learning and natural language processing (NLP) to process audio data and convert it into words that can be used in businesses. Integration of AI-powered voice recognition tools offers opportunities for the e-commerce industry to further improve customer experience.

The increasing adoption of AI-enabled voice recognition technology in the e-commerce industry helps to enhance user experience by enabling hands-free interactions, improving accessibility, and facilitating efficient voice search for products. The technology is also integrated into virtual assistants that provide personalized recommendations based on user preferences. It helps consumers to easily search for products, place orders, and navigate online stores. Additionally, advancements in natural language processing and machine learning contribute to improved accuracy and responsiveness, further encouraging businesses to integrate voice recognition into their e-commerce platforms.

Several organizations are focused on offering AI-enabled speed & voice recognition technology for e-commerce platforms. For instance, in February 2023, Slang Labs (India) launched CONVA to provide smart and highly accurate multilingual voice search capabilities for e-commerce mobile and web apps. Also, in January 2022 , Flipkart Private Limited (India) launched the Voice Search feature on its e-commerce platform by providing voice commands in Hindi and English. Such developments support the adoption of AI-enabled voice & speech recognition technology in e-commerce industry and further offer growth opportunities for AI in e-commerce market.

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Key Findings in the Global AI in E-commerce Market Study:

In 2024, the Machine Learning (ML) Segment is Expected to Dominate the Global AI in E-commerce Market

Based on technology, the global AI in e-commerce market is segmented into machine learning (ML), natural language processing (NLP), computer vision, deep learning, and other technologies. In 2024, the machine learning (ML) segment is expected to account for the largest share of the global AI in e-commerce market. The large market share of this segment is attributed to the increasing use of machine learning technology in customer experience management, customer behavior tracking, and predictive merchandising to engage customers and increase productivity.

The Vertical E-commerce Segment to Register the Highest CAGR During the Forecast Period

Based on business model, the vertical e-commerce segment is projected to register the highest CAGR during the forecast period. The growth of this segment can be attributed to the increasing demand for specialized products and tailored shopping experiences within a specific product category or industry. The vertical E-commerce model allows businesses to focus on a specific niche to differentiate themselves from larger, more generalized e-commerce platforms and establish a strong brand identity.

In 2024, the On-premise Deployment Segment is Expected to Dominate the Global AI in E-commerce Market

Based on deployment mode, the global AI in e-commerce market is segmented into on-premise deployment and cloud-based deployment. In 2024, the on-premise deployment segment is expected to account for the larger share of the global AI in e-commerce market. The large market share of this segment is attributed to the high preference for on-premise deployments among large enterprises and security issues associated with cloud deployments.

The Electronic Products Segment to Register the Highest CAGR During the Forecast Period

Based on product offering, the electronic products segment is projected to register the highest CAGR during the forecast period. The growth of this segment is attributed to the high demand for electronic devices, including smartphones, and the incorporation of advanced technologies, including chatbots, face recognition payments, and image/voice search technologies, to enhance customer engagement in online shopping platforms.

In 2024, the B2B Segment is Expected to Dominate the Global AI in E-commerce Market

Based on end user, the global AI in e-commerce market is segmented into B2B and B2C. In 2024, the B2B segment is expected to account for the larger share of the global AI in e-commerce market. The large market share of this segment is attributed to the increasing need for B2B transaction security, the increasing focus of organizations to boost their brand name, and the increasing adoption of AI for pricing optimization, inventory management, improved efficiency, and increased profitability.

Asia-Pacific is Expected to Register the Highest CAGR During the Forecast Period

Based on geography, Asia-Pacific is projected to register the highest CAGR during the forecast period. The growth of this region is attributed to the large consumer groups, growing penetration of smartphones and the internet, rising disposable income, and technological advancement in various countries such as South Korea and Japan.

AI in E-commerce Market: Key Players

The report includes a competitive landscape based on an extensive assessment of the key growth strategies adopted by major market players in the last three to four years. The key players profiled in the global AI in e-commerce market study are Amazon Web Services, Inc. (U.S.), Google LLC (U.S.), IBM Corporation (U.S.), Alibaba Cloud (China), Intel Corporation (U.S.), Microsoft Corporation (U.S.), Shelf.AI (Portugal), Appier Inc. (Japan), NVIDIA Corporation (U.S.), Granify, Inc. (Canada), Oracle Corporation (U.S.), Manthan Software Services Pvt. Ltd. (U.S.), SAP SE (Germany), LivePerson, Inc. (U.S.), and Twiggle Ltd. (Israel).

AI in E-commerce Market Report Summary:

Key questions answered in the report: