This article originally appeared on DATAQUEST India.

Generative AI has been making waves in the tech world with its amazing potential to transform the way we do things. In eCommerce, in particular, it has found many applications – from content creation to customer service to personalized experiences.  Whether it's creating realistic images and videos or crafting highly targeted marketing messages, generative AI is changing how businesses run and engage with their customers.

This powerful technology works because of data and predictive analytics. It enables generative AI to learn, adapt, and generate highly relevant outputs. By analyzing vast amounts of data, it can identify patterns, anticipate trends and generate accurate predictions. 

By 2030, India is expected to have the world’s second-largest base of online shoppers. With a rapidly expanding consumer base and increasing digitization, the country’s eCommerce market is likely to surpass $150 billion by 2025. For many businesses, keeping up with this rapid growth is a significant challenge. Successfully leveraging predictive analytics and generative AI will be the game changer.

This technology has numerous applications, with demand forecasting being one of the most commonly used. It can predict demand trends, helping with inventory management so that businesses can avoid out-of-stock or overstock situations. It can also simulate supply chain scenarios to predict possible disruptions and improve logistics. A particularly exciting use is in dynamic pricing, where the AI models can analyze market trends and competitor pricing to simulate different pricing strategies that maximize profitability.

Generative AI is transforming the way brands approach content creation. By automating the whole process, whether it is producing ad copy, product descriptions, or email marketing content, businesses can scale their marketing efforts easily. By generating content at a high quality without the need for extensive human input, they can save time and resources, enabling teams to focus on strategic tasks that drive growth.

In eCommerce, success ultimately hinges on the customer experience. While predictive analytics can sift through customer data to tailor shopping experiences, generative AI elevates this by offering instant, personalized product recommendations as users explore your site. Additionally, AI-driven chatbots enrich customer interactions by providing responses that are not only precise but also genuinely empathetic, mimicking the warmth of human conversation.

Today, businesses can easily tap into emerging customer preferences, even from unconventional sources, such as social media conversations (where most consumers spend most of their time). By analyzing user-generated content, reviews, and social trends, AI models can identify shifting consumer preferences long before they become mainstream. This gives brands a competitive edge, allowing them to quickly adapt to new trends and adjust their strategies in real time.

However, most Indian companies face significant challenges in the application of predictive analytics and generative AI. Customer data is often scattered across mobile apps, websites, social channels, physical stores, and other touchpoints, making it difficult to consolidate into a single, actionable source. This fragmented data structure hinders AI models from fully understanding and accurately interpreting customer information.

As India’s eCommerce market continues its exponential growth, businesses that effectively harness generative AI-powered predictive analytics will lead the charge in innovation. Brands that can overcome data fragmentation and build the necessary technical expertise stand to gain increased efficiency, enhanced customer experiences, and a strong competitive edge. 

As more companies strive to extract maximum value from it, those that adopt scalable and robust AI solutions will not only thrive but also lead the industry. Whether it’s precision in demand forecasting, dynamic pricing, or personalized customer engagement, generative AI is poised to drive India’s fast-growing eCommerce industry to the next level.

Authored By Prem Bhatia, Co-Founder and CEO, of Graas.