Flipkart just figured out a way to one-up Amazon: AI and a decade of data
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India’s largest homegrown e-commerce giant, Flipkart, is making a big push for artificial intelligence (AI).
A new unit, AI For India, will use AI technologies to mine the consumer data that Flipkart has gathered over the last decade to strengthen its business offerings, a company blog post said on Dec. 21.
Flipkart will invest “hundreds of millions of dollars” in AI For India over the next few years, co-founder and group chairman Sachin Bansal told the Mint newspaper. The new unit will be headed by Flipkart’s chief data scientist Mayur Datar. Bansal, along with CEO Kalyan Krishnamurthy, will directly work on some key projects.
“In Indian retail and commerce, the overall use of technology is very low right now as we’re still reliant on traditional practices. It’s not just in the front-end where the use of technology is low and scattered, but even areas like manufacturing and distribution are currently only starting to use technology in some ways,” Bansal said in the blog post. “Over the next decade, AI will become a significant driving force of innovation and change across varied sectors in the Indian economy.”
The company expects its AI initiative to impact every aspect of its business, including customer support, warehousing, mobile app experience, search or recommendations, marketing, and cataloging.
AI For India could help Flipkart provide its existing customers better insights, as well as attract new buyers. For example, the company said it will use natural language processing—a stream of AI related to programming computers to process natural human language data—to cater to people who aren’t proficient in English. This could go a long way in getting more users in smaller cities.
“With AI, they’ll be able to analyse (user) behaviour better and, therefore, they’ll be able to penetrate (the market) better…their ability to engage with the customer should improve significantly,” Harish HV, a partner at Grant Thornton India LLP, told Quartz.
The India pitch
Flipkart has set up this unit to use AI for a “highly localised and homegrown approach to problem-solving” for India. Over the next five years, it will use its AI platform to solve “complex problems unique to India,” the e-commerce major said.
“As the evolution of e-commerce over the last decade has shown, parachuting a globally tried and tested model into the Indian market does not guarantee success on the local stage,” the company said in the blog post. “Flipkart, a homegrown e-commerce market leader, has expended time, energy, and effort to understand the nuanced psyche of Indian customers to create unique, path-breaking solutions aimed at addressing their unique needs and pains.”
Analysts, though, aren’t quite sold on this pitch. As the posterboy of Indian internet businesses, Flipkart should be focused on building products that can be replicated globally, Yugal Joshi, practice director at Everest Group, told Quartz. Branding the programme “AI For India” could well be a way of positioning itself as more Indian than competitor Amazon, he added.
“Why would you name your programme ‘AI For India’? The concepts of AI are similar globally. The technology leverage may change but the concept will be the same,” Joshi said. “This branding is somewhat troubling because as a technology powerhouse, which is supposed to be a haven for tech skills, if Flipkart ends up thinking along the line that this is only for India, then there’s something strange in its approach.”