PUBLISHER: The Business Research Company | PRODUCT CODE: 1847254
PUBLISHER: The Business Research Company | PRODUCT CODE: 1847254
Artificial intelligence (AI) in e-commerce involves the utilization of AI technologies and methodologies to enhance different facets of online shopping and elevate the overall customer experience within the realm of electronic commerce. AI plays a crucial role in e-commerce by improving customer interactions, boosting sales, streamlining operations, and reducing costs.
The key technologies for implementing artificial intelligence in e-commerce encompass natural language processing (NLP), deep learning, and machine learning. Natural language processing is a branch of AI that centers on the interaction between computers and human language. These AI technologies can be deployed through various methods, including cloud-based and on-premise solutions. They are applied in diverse e-commerce applications such as customer relationship management, supply chain analysis, analysis of fraudulent reviews, warehouse automation, merchandising, product recommendations, customer service, and more. These applications cater to various industries and end-users, including information technology and telecommunications, retail and e-commerce, banking, financial services, insurance (BFSI), healthcare, manufacturing, automotive, and others.
Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.
The sharp rise in U.S. tariffs and the ensuing trade tensions in spring 2025 are having a significant impact on the information technology sector, especially in hardware manufacturing, data infrastructure, and software deployment. Increased duties on imported semiconductors, circuit boards, and networking equipment have driven up production and operating costs for tech companies, cloud service providers, and data centers. Firms that depend on globally sourced components for laptops, servers, and consumer electronics are grappling with extended lead times and mounting pricing pressures. At the same time, tariffs on specialized software and retaliatory actions by key international markets have disrupted global IT supply chains and dampened foreign demand for U.S.-made technologies. In response, the sector is ramping up investments in domestic chip production, broadening its supplier network, and leveraging AI-powered automation to improve resilience and manage costs more effectively.
The artificial intelligence in e-commerce market research report is one of a series of new reports from The Business Research Company that provides artificial intelligence in e-commerce market statistics, including artificial intelligence in e-commerce industry global market size, regional shares, competitors with artificial intelligence in e-commerce market share, detailed artificial intelligence in e-commerce market segments, market trends and opportunities and any further data you may need to thrive in the artificial intelligence in the e-commerce industry. This artificial intelligence in e-commerce market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.
The artificial intelligence in e-commerce market size has grown rapidly in recent years. It will grow from $8.06 billion in 2024 to $9.12 billion in 2025 at a compound annual growth rate (CAGR) of 13.2%. The growth in the historic period can be attributed to demand for personalized shopping experiences, improved search and discovery, chatbots and virtual assistants, government support for ai development.
The artificial intelligence in e-commerce market size is expected to see rapid growth in the next few years. It will grow to $16.3 billion in 2029 at a compound annual growth rate (CAGR) of 15.6%. The growth in the forecast period can be attributed to increasing focus on customer data analytics, increasing investments in the ai in e-commerce, growing demand for ai-powered product recommendations, increasing use of ai in supply chain management, increasing use of ai in fraud detection. Major trends in the forecast period include technological advancements in ai, voice commerce expansion, supply chain optimization, ai-enhanced customer support, conversational e-commerce.
The forecast of 15.6% growth over the next five years reflects a slight reduction of 0.1% from the previous projection. This reduction is primarily due to the impact of tariffs between the US and other countries. The U.S. e-commerce sector might see increased operational costs as tariffs impact AI recommendation engines and fraud detection systems built overseas. The effect will also be felt more widely due to reciprocal tariffs and the negative effect on the global economy and trade due to increased trade tensions and restrictions.
The surge in online shopping is anticipated to drive the growth of artificial intelligence in the e-commerce market in the coming years. Online shopping involves purchasing goods or services from a seller via the Internet using a web browser or mobile app. In e-commerce, artificial intelligence is leveraged to improve the customer experience and streamline business operations, such as optimizing prices and managing inventory. For example, in August 2023, Shopify Inc., a Canada-based e-commerce company, projected that the global e-commerce market would reach $4.8 trillion by 2025, with continued growth expected in subsequent years. This trend underscores the growing profitability of cross-border e-commerce for online retailers. By 2027, it's expected that approximately 23% of total retail sales will occur online. Consequently, the increase in online shopping is fueling the expansion of artificial intelligence within the e-commerce sector.
The growing internet penetration is set to drive the expansion of the artificial intelligence in the e-commerce market in the future. Internet penetration, defined as the percentage of a given population or group with internet access, plays a crucial role in fueling the adoption of AI in e-commerce. It achieves this by providing a wealth of data, expanding the customer base, and enhancing various aspects of the shopping experience, as well as operational efficiency and competitiveness. As of September 2023, reports from Broadband Search, a US-based company specializing in internet and TV provider data, estimate that 93.79% of the United States' population, approximately 311.3 million individuals, currently have access to the internet. Therefore, the increasing internet penetration is a driving force behind the artificial intelligence in the e-commerce market.
Privacy-related concerns linked to the utilization of AI in e-commerce pose a substantial obstacle to the growth of the artificial intelligence (AI) market within the e-commerce industry. It is vital for e-commerce businesses to effectively address these privacy concerns to ensure the widespread adoption and advancement of AI technology in this sector. For example, as of October 2021, a study reported by Commerce Times, a US-based publication, revealed that approximately 70% of consumers abandon their purchases due to apprehensions related to privacy. As a result, these privacy concerns regarding AI deployment in e-commerce are impeding the prospective growth of the artificial intelligence market in the e-commerce sector.
Prominent firms operating within the artificial intelligence in the e-commerce sector are actively pursuing the development of innovative technologies, such as generative AI e-commerce SaaS solutions, to maintain their competitive edge in the market. These generative AI technologies integrated into e-commerce SaaS platforms empower users by offering personalized, automated inventory management and cutting-edge product discovery experiences. As an illustrative example, in May 2023, Hype, an e-commerce company based in India, introduced a generative AI-driven e-commerce Software-as-a-Service (SaaS) platform. This pioneering platform has the potential to transform the landscape of online commerce by granting merchants the capability to establish, optimize, and oversee their online stores. Its foundation relies on a sophisticated artificial intelligence and machine learning framework that continuously learns and adapts to the unique data patterns of each individual store.
In February 2023, eBay Inc., a US-based e-commerce company at the forefront of artificial intelligence, completed the acquisition of 3PM Shield LLC for an undisclosed sum. This strategic move by eBay is designed to provide both sellers and customers with a safe and dependable platform that harnesses advanced technology. Additionally, it will expedite the implementation of state-of-the-art technology aimed at combating counterfeit products, unsafe merchandise, and illegal items. 3PM Shield LLC, a US-based software firm, specializes in delivering market compliance solutions that enhance the e-commerce experiences of customers through the integration of artificial intelligence.
Major companies operating in the artificial intelligence in e-commerce market are Apple Inc., Google LLC, Microsoft Corporation, Amazon Web Services Inc., Siemens AG, Intel Corporation, The International Business Machines Corporation, Oracle Corporation, SAP SE, Nvidia Corporation, Sentient Technologies, Bloomreach, Aidaptive, Coveo, Dynamic Yield, Persado, Emarsys eMarketing Systems, Syte, Bluecore, Twiggle, Kindred AI, ViSenze, Gorgias, Layer 6 Inc., Nauto.
North America was the largest region in the artificial intelligence in e-commerce market in 2024. The regions covered in artificial intelligence in the e-commerce report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa.
The countries covered in the artificial intelligence in the e-commerce market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Artificial Intelligence In E-commerce Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on artificial intelligence in e-commerce market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for artificial intelligence in e-commerce ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The artificial intelligence in e-commerce market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the technological advancements such as AI and automation, Russia-Ukraine war, trade tariffs (government-imposed import/export duties), elevated inflation and interest rates.