Amazon to Meesho race to crack LLM-powered shopping as AI reshapes ecommerce

AI answers often list, at most, three options. “If you’re not in the answer, you don’t exist for that user,” said Sohom Banerjee, senior research associate at CUTS International, an industry forum. “Unlike Google, where result #5 still gets traffic, AI sharply narrows visibility.”

Bain & Company estimates that by 2030, AI shopping agents could influence 15–25% of ecommerce sales. ChatGPT already accounts for roughly 20% of referral clicks to retailers such as Walmart and Etsy, while about 2% of all ChatGPT queries—nearly 50 million a day—are shopping-related.

Engagement is also rising: between March and June 2025, click-through rates on ChatGPT answers climbed from 2.2% to 5.7%, with total clicks roughly tripling, Bain found. Indian online retailers can’t ignore the implications as the country is among OpenAI’s largest user bases.

Flipkart acquired a majority stake in AI startup Minivet aims to better leverage this opportunity. The Walmart-backed company said the deal would accelerate its push into “visual, conversational, and AI-led discovery” as shopping behaviour evolves.

Amazon, too, has begun piloting generative engine optimisation (GEO) for product categories such as fashion after the end-of-the-sale season this year, according to a person aware of the development.

Amazon also runs its own AI shopping assistant, Rufus.

Meesho, Myntra and Ajio are also refining catalogue structures and metadata to ensure better surfacing across LLMs (large language models), three people familiar with the matter said.

Meesho has been standardizing seller-generated listings and tightening attribute-level data, including vernacular descriptions, to improve AI-led recall, according to a person familiar with the matter.

Flipkart-owned Myntra is expected to follow Flipkart’s broader AI-led discovery push, sharpening fashion-specific metadata such as fabric, fit and occasion to support conversational and visual search, said another person aware of the discussions.

Reliance Retail’s Ajio has also been optimizing its catalogue, category and brand signals to improve visibility across AI-driven search and recommendation layers, a third person said.

Queries emailed to Amazon, Flipkart, Meesho, Myntra and Ajio on 26 December did not elicit a response.

The shift isn’t limited to traditional marketplaces. Quick-commerce platform Zepto has developed an internal AI tool that lets an LLM place Zepto Cafe orders using natural-language instructions. The project, which began as an internal experiment by a Zepto engineer, was latershared on GitHub andpromoted by co-founder and chief executive Aadit Palicha on LinkedIn.

Even the National Payments Corporation of India (NPCI) integrated ChatGPT with UPI in a pilot with Razorpay in October, and Tata group-owned BigBasket allowed users to shop and pay within ChatGPT.

Globally, ChatGPT has partnered with players like Etsy and Walmart for chatbot-led shopping, while Perplexity AI has tied up with Shopify and PayPal to enable AI commerce.

Startups, too, are offering services to boost AI search discovery. Y Combinator-backed Siftly, Bengaluru-based Asva AI and Pune-based Consumable AI provide generative engine optimisation (GEO) and LLM optimisation services to brands as users increasingly turn to chatbots for search.

Meanwhile, IndiaMART, a listed B2B marketplace, has moved the Calcutta High Court against OpenAI, alleging that its listings are being deliberately excluded from ChatGPT’s search results, even as rival ecommerce and B2B platforms continue to appear. The matter is listed for further hearing on 13 January 2026, when OpenAI is expected to present its arguments. Queries sent to OpenAI did not elicit a response until press time.

In its petition—reviewed by Mint—IndiaMART says large AI services have become “intent-driven gateways” that shape what users see, giving them growing economic and strategic power.

IndiaMART claims its exclusion from this layer has had a “catastrophic” impact on its business.

Vendors risk being overshadowed by bots or AI-generated content, not because of weaker products, but because of how widely competing listings are available across the internet, said Abhivardhan, president, Indian Society of Artificial Intelligence and Law, an industry forum.

For years, brands have poured money into ads measured by metrics like viewability. A “viewed” ad is defined as having at least 50% of its pixels on screen for one second for display ads, or two seconds for video.

“Viewability validates ad geometry, not human presence. It tells you where an ad appeared and for how long, not whether a real human actually saw or processed it,” said Amit Relan, chief executive and co-founder of digital trust firm mFilterIt.

AI has learned to exploit this gap. Bots can simulate scrolling and dwell time, generating impressions that are 100% viewable but deliver zero human attention. In India, up to 20% of digital ad budgets may be wasted due to ad fraud, estimates CUTS International.

When an LLM directly answers queries like “best smartphone under ₹20,000” or “quick lunch options nearby”, it compresses what was once a long funnel into a single response, with intent often explicit in the query itself.

That shift has clear implications for where ad money flows, because it also turns the internal search page redundant, explained CUTS’ Banerjee.

Meta’s recent Andromeda update, which uses AI to optimize on-platform advertising, will increasingly shift power away from smaller agencies and towards large platforms themselves. While overall ad spend will continue to rise as organic reach declines, the structure of that spend is likely to change, said Nihal Bordoloi, founder of advertising firm BIG Media Solutions.

Digital media now accounts for over half of total advertising spend in India, with ecommerce companies together generating about $3 billion in ad revenue last year, Mint had reported earlier.

Early signs suggest budgets are starting to shift. Brands are currently allocating 2–5% of marketing spend to AI optimisation and integrations as an experimental bet.

As AI discovery proves effective, spend will move away from weaker channels, with conversational commerce potentially capturing high single digits to ~10% of digital ad spend within a few years, largely at the expense of search and low-quality programmatic display, estimates Banerjee.

OpenAI is also mulling "sponsored content" through ads, The Information reported last week.

Amazon India’s advertising and allied services revenue rose 25% in FY25, outpacing the 21% growth of its core marketplace business and making it one of the company’s fastest-growing segments, according to data from business intelligence platform Tofler.

Flipkart, Amazon India’s closest rival, has also scaled up its ad business, posting ₹6,317 crore in advertising revenue in FY25, a 27% year-on-year increase.