Artificial intelligence (AI) is reshaping the landscape of e-commerce, driving efficiency, enhancing customer experiences, and transforming supply chain management. Hari Menon, cofounder and CEO of BigBasket, India’s leading online grocery store, shared his insights on the profound impact of AI and other immersive technologies like Augmented Reality (AR) and Virtual Reality (VR) in the e-commerce sector in a recent event.
Adoption of AI in E-commerce Operations
Menon emphasized that AI is already ubiquitous in e-commerce operations, although it is still in the early stages. Companies are experimenting with AI, piloting various applications to understand and leverage its benefits. “I don’t think we have a choice but to adopt and use AI. It’s already everywhere. We’re in the early days and stages, and companies are experimenting with it, piloting, and trying a few things to understand the benefits it can deliver. I always recommend to startups today to pick up small pilots and start experimenting. It’s already starting to deliver results in a few areas,” Menon stated, highlighting the necessity for businesses to integrate AI into their operations to stay competitive.
One significant area where BigBasket is seeing immediate benefits is in content management. By utilizing AI, the company has been able to produce higher quality content with its workforce, improving efficiency and output. “We’re now completely relying on what AI delivers, and it provides reasonably good output. We’re finding that we’re able to get much higher quality content with the same number of people. So that’s one area where we’re seeing immediate benefits,” Menon noted.
Customer service, a critical component of BigBasket’s operations, has also been significantly enhanced through AI. The company employs approximately 1,400 people dedicated to customer queries. AI-driven bots have increased the accuracy and efficiency of customer interactions, though Menon acknowledges the challenge of making bots more user-friendly. “Customers don’t like speaking to bots. nBut I think when they start becoming a little more friendly, that element will also start changing,” he explained.
In the supply chain domain, AI tools are being deployed to improve inventory management and efficiency. These tools help in optimizing processes and refining buying techniques, leading to substantial cost savings without impacting jobs. “All it’s doing is making sure we’re improving processes and understanding some of our buying techniques a lot better,” Menon remarked.
Warehouse management is another area where technology has revolutionized operations. With extensive automation, BigBasket has significantly reduced errors and enhanced efficiency. Menon highlighted the company’s 99.6% fill rate, a benchmark in the global grocery industry, as an example of technology’s impact. “Our entire warehouse management processes have evolved significantly over the past 10 years. As an inventory-led company selling close to 50,000 products, we manage a large amount of inventory. Our warehousing is now reasonably automated, with most of the work done using technology. This automation reduces errors, particularly picking errors,” stated Menon.
“To illustrate, I’ll share a statistic that is benchmarked as one of the best in the world: our fill rate. This is critical in the grocery business. When customers order a large number of items online, such as 15 or 20, it is essential that they receive all the items. If even two items are missing, customers might be forced to visit a physical store, defeating the purpose of shopping online. Thanks to our advanced technology, we maintain a very high fill rate, ensuring customer satisfaction, and we run today at a 99.6% fill rate,” he said.
Will AI Impact E-commerce Jobs?
Hari Menon said: “Right now, AI isn’t taking away any jobs because we’ve consciously decided to ensure that. In areas like supply chain management, all AI does is improve and make processes more efficient, so there won’t be any job losses there. However, when it comes to content, I might need fewer people to generate the same quality and quantity of content in the future.
There are two sides to this issue. Many believe that AI won’t take away jobs but will make them better and more efficient. On the other hand, I think AI will take away some jobs. We’re not worrying too much about it right now, but I believe there will be AI interventions that lead to job losses and others that don’t. We just need to live with it. One key problem is that the people who lose jobs due to AI won’t be the same ones who get new jobs or activities created by AI, leading to a significant displacement in the workforce.”
Is It Possible to Create and Alibaba or Amazon in India
Menon stated that he believes that India is already on its way to creating large e-commerce companies. “It is already happening. Amazon is already here and large in scale. The critical factor for companies like Amazon and Alibaba to enter India was the ecosystem, including digital infrastructure and supply chains.
Starting from 2007-2008, we saw significant developments in India. For example, Flipkart, which I respect and believe will become one of the leading companies, was established around 2006-2007. Before that, in 1999-2000, when I set up my first e-commerce company, the infrastructure was inadequate. But from 2007-2008 onwards, the scenario started changing, allowing companies like Flipkart to scale effectively.
Flipkart is here, and I believe it will reach the high levels we are discussing. Jio, part of the large Reliance conglomerate, is also scaling rapidly. These companies primarily operate in the horizontal space. In the vertical space, companies like Nykaa in beauty, and BigBasket in groceries, are also scaling. In mobility, we saw huge growth in Ola, which at one point was even bigger than Uber, although COVID impacted this growth. In summary, it’s already here and happening. We have the ecosystem ready to accommodate large-scale operations,” he commented.
