Business Today

Flipkart takes another step towards AI capabilities; is looking to invest in Silicon Valley startups

It certainly can't afford to slacken pace in this direction - Amazon has not only invested extensively in AI to improve its marketplace but has recently pumped in Rs 1,960 crore into its India unit.

twitter-logo BusinessToday.in   New Delhi     Last Updated: February 6, 2018  | 18:46 IST
Flipkart takes another step towards AI capabilities; is looking to invest in Silicon Valley startups
PC: Reuters

In late December last year, Flipkart co-founder and Chairman Sachin Bansal had announced plans to invest 'hundreds of millions of dollars' in the artificial intelligence (AI) initiative over the next few years. It has already created a separate unit within its organization, called AIforIndia, to focus on the development and application of AI. The home-grown e-tailer is now reportedly eyeing acquisitions in Silicon Valley to further ramp up its tech infrastructure. It is looking to invest over USD 25 million in at least one AI startup to import the relevant technology and continue enjoying its current edge over rival Amazon.

"They (Flipkart) are looking at tech acquisitions in the Valley because differentiated tech is a new focus area for the company," a person aware of the company's plans told The Economic Times, on condition of anonymity, adding that "the idea is to bring these Indian tech founders from the US, who can bring deep technology capabilities that don't exist in India".

Citing the example of Flipkart's catalogue management system, broken for two-odd years now, the source claimed that the e-tailer is lagging behind with respect to technology by about four or five years while Amazon has more people in its technology division globally, thereby ensuring that multiple services are ready to be deployed when the business teams need it.

This won't be the first time that Flipkart will invest in Silicon Valley. In 2015, it acquired the F7 Labs, where a team of data scientists and data engineers are currently focussing on building AI-based products. The firm reportedly plans to apply AI in a wide range of areas, both on the consumer side and on its supply side. Think everything from customer service to inventory management and logistics. Last year, it started recruiting dozens of AI experts as well as building infrastructure and striking hardware partnerships to make its AI push successful.

It certainly can't afford to slacken pace in this direction - Amazon has not only invested extensively in AI to improve its marketplace but has recently pumped in Rs 1,960 crore into its India unit to grab a larger share of India's ballooning e-commerce pie.

The latest Economic Survey sees India's ecommerce market crossing Rs 2,117 billion in this fiscal. More significantly, Euromonitor expects about half of India's population to be online by 2021, up from around 30 per cent in 2016 - with a majority hailing from rural areas and smaller towns - by which time the Internet retailing market size is likely to balloon to around Rs 4,000 billion. No wonder the battle for eyeballs is getting so aggressive.

 

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