The landscape of online shopping in India is undergoing a fundamental shift, driven not by traditional apps but by artificial intelligence. Consumers are increasingly bypassing marketplace apps like Amazon and Flipkart altogether, placing orders directly through conversational AI assistants like ChatGPT, Claude, or Google Gemini. This change is forcing every major player in Indian e-commerce to rethink their entire discovery and search strategy to stay visible in an AI-first world.
The New AI Gatekeepers and the Fight for Visibility
For decades, e-commerce discovery was built on keywords, search engine rankings, and sponsored product slots. Today, AI chatbots are guiding users on what to buy, where to buy it, and at what price, often without the user ever opening a dedicated shopping app. This presents an existential challenge for retailers. Bain & Company estimates that by 2030, AI shopping agents could influence 15–25% of all e-commerce sales. The stakes are incredibly high.
Unlike a traditional Google search results page with ten blue links, an AI answer typically lists just two or three options. "If you’re not in the answer, you don’t exist for that user," explained Sohom Banerjee, a senior research associate at the industry forum CUTS International. "Unlike Google, where result #5 still gets some traffic, AI very sharply narrows visibility."
The engagement numbers are staggering. ChatGPT already accounts for roughly 20% of referral clicks to major retailers like Walmart and Etsy. About 2% of all ChatGPT queries—nearly 50 million per day—are now shopping-related. Between March and June 2025, click-through rates on shopping answers within ChatGPT climbed from 2.2% to 5.7%, with total clicks roughly tripling.
How Indian E-commerce Giants Are Responding
Recognizing the urgency, Indian online retailers are scrambling to optimize their platforms for AI search, a process often called Generative Engine Optimisation (GEO) or LLM optimisation.
Flipkart acquired a majority stake in AI startup Minivet to accelerate its push into "visual, conversational, and AI-led discovery." Its fashion arm, Myntra, is sharpening fashion-specific metadata like fabric, fit, and occasion to support this new search paradigm.
Amazon has begun piloting GEO for categories like fashion and runs its own AI shopping assistant named Rufus. Meesho has been standardizing seller listings and tightening attribute-level data, including vernacular descriptions, to improve its AI-led recall. Reliance Retail's Ajio is also optimizing its catalogue and brand signals for better AI visibility.
The shift extends beyond traditional marketplaces. Quick-commerce player Zepto developed an internal AI tool that lets an LLM place orders at Zepto Cafe using natural language. In a significant pilot, the National Payments Corporation of India (NPCI) integrated ChatGPT with UPI in October 2025, and Tata's BigBasket allowed shopping and payment within the ChatGPT interface.
Legal Friction and Wider Business Implications
This rapid transition is not without conflict. Last month, Amazon asked Perplexity AI to block its shopping agent from making purchases on Amazon on behalf of users. In a major legal move, B2B marketplace IndiaMART has filed a case in the Calcutta High Court against OpenAI, alleging its listings are being deliberately excluded from ChatGPT's results while rivals appear. The court will hear the matter on 13 January 2026.
In its petition, IndiaMART argues that large AI services have become "intent-driven gateways" with significant economic power, and its exclusion has had a "catastrophic" business impact. The disruption also threatens smaller merchants, marketers, and ad agencies. Vendors risk being overshadowed not due to product quality, but because of how their data is structured for AI consumption.
Furthermore, AI is exposing flaws in digital advertising. Bots can simulate human scrolling to generate "viewable" ad impressions that deliver zero real attention. CUTS International estimates up to 20% of India's digital ad budgets may be wasted on such fraud. As AI compresses the shopping funnel into a single answer, it makes internal marketplace search pages less relevant, redirecting ad spend.
Advertising Revenue Gets a Boost from AI
Paradoxically, AI-led discovery is concentrating attention and reinforcing ad revenues for the largest platforms. By controlling catalogue data, logistics, and checkout, giants like Amazon and Flipkart can monetize user intent more directly by placing promoted products inside AI-driven answers.
The financial results are clear. Amazon India's advertising revenue grew 25% in FY25, outpacing its core marketplace growth. Its closest rival, Flipkart, posted advertising revenue of ₹6,317 crore in FY25, a 27% year-on-year increase. OpenAI itself is reportedly considering introducing "sponsored content" through ads.
Early signs show marketing budgets are shifting. Brands are currently allocating 2–5% of spend to AI optimisation as an experimental bet. Experts like Banerjee predict that as AI proves effective, high single-digit to 10% of digital ad spend could move to conversational commerce, largely at the expense of traditional search and low-quality display ads.
The race is on. As AI reshapes the very foundation of online discovery, Indian e-commerce companies are in a high-stakes battle to ensure they are not just visible on a screen, but present in the mind of the machine.
