Google’s New AI Shopping Features Set to Disrupt Retail SaaS and E-Commerce Platforms

Google has taken a bold step into the e-commerce space with the introduction of AI Mode—an advanced shopping experience that integrates over 50 billion product listings from global retailers and small businesses alike. Designed to function as a virtual shopping concierge, this AI-powered tool enables users to discover, compare, and purchase products directly within the search ecosystem—disrupting retail SaaS platforms and e-commerce discovery tools in the process.

Unveiled during a recent event, AI Mode comes equipped with real-time product availability, price comparisons, color options, reviews, virtual try-on capabilities, and an "agentic" checkout process—all accessible from the Google search interface. Though initially rolling out in the US, Google plans to expand this feature globally.

The impact could be seismic, particularly for startups and SaaS providers that build basic storefront infrastructure, product recommendation engines, checkout solutions, and AR/VR shopping tools. Google’s built-in AI tools now offer these functions natively, effectively commoditizing several previously premium services.

India’s Retail Tech Ecosystem at Risk

“In India, where retail relies on discovery, trust, and low-friction payments, Google’s move poses a greater threat to marketplaces and mid-tier D2C aggregators than to pure SaaS players,” said Sunil Nair, COO and Co-founder of Mela Platforms. "For startups focused on storefront tech or virtual try-ons, this is both validation and competition."

Indian players in this space include:

Fynd (Omnichannel retail solutions)

Tagalys (AI-driven product discovery)

Scapic (3D and AR commerce, acquired by Flipkart)

Vue.ai (AI merchandising, now part of M2P Fintech)

GoKwik (Checkout optimization and conversions)

These companies may now need to reassess their defensibility as Google enters their playing field.

A Shift Toward Ambient Commerce

According to Sanchit Vir Gogia, CEO of Greyhound Research, Google’s AI Mode marks a pivotal shift toward ambient commerce—where AI doesn’t just enhance the shopping journey but becomes the foundation of it. “This will accelerate the commoditization of niche AR and storefront features, pushing start-ups to either integrate into bigger platforms or specialize further to survive,” he said.

Even established platforms like Instagram could feel the pinch, as user attention shifts to immersive, multimodal shopping environments built directly into search.

“Most SaaS Tools Will Be Invalid Overnight”

Ashwini Asokan, co-founder of Mad Street Den (creator of Vue.ai), believes the disruption will be swift and sweeping. “SaaS tools will be invalid overnight. Google will bundle these capabilities into its cloud services as part of GCP commitments. Only a few players will survive; the rest will be consolidated or absorbed by cloud giants,” she said.

Asokan notes that while enterprises previously chose vertical SaaS platforms for precision and quality, generative AI has changed the game.

Not All Hope Is Lost

Despite Google’s aggressive play, existing e-commerce leaders like Amazon, Flipkart, and Meesho have already embedded AI across their platforms—from product search and cataloging to checkout and logistics—giving them a strategic edge in customer retention and pricing competitiveness.

However, Gogia cautions that brands and platforms must now view AI not as a feature, but as their central operating system to remain competitive and minimize long-term risk.

Google’s AI Mode could fundamentally reshape the e-commerce landscape—challenging the relevance of traditional SaaS solutions and discovery platforms. For startups and incumbents alike, the message is clear: innovate, integrate, or risk irrelevance.