Can ChatGPT's Shopify deal hurt Google's search business?

The Hindu

02-05-2025

A year after OpenAI launched ChatGPT, on the company's developer community, one member broached: 'Looking for a shopify [sic] solution which can index product data from the store and recommend users with products based on user message.' In response, another one replied: 'You could build a dynamic web-scraper, using Selenium and beautiful soup [sic], to extract the html [sic] from web pages and then implement functionality to instruct the API to extract certain elements, like prices.' After roughly two years later, OpenAI took a different, but easy path to make the integration.
On April 29, the Microsoft- and Softbank-backed AI startup announced it is experimenting with a shopping feature that will visually display product details and pricing to users based on the context of their interaction with the bot. While the Sam Altman-led company did not reveal how the back-end of this feature works or whether it has formally tied up with online commerce platform Shopify to make this happen, some developers spotted a new code in ChatGPT's public web bundle a few days earlier that revealed a Shopify checkout link, along with fields for shopping, price, product ratings and purchasing.
Tobi Lutke, CEO of Shopify, put rumours to rest on platform X, saying, 'There is so much potential in this [integration]. The beginning of a totally new modality of shopping. Extremely excited.'
A new shopping paradigm?
Taking the cue for Mr. Lutke's post, this integration between Shopify and ChatGPT marks a turning point in the evolution of online commerce that could dramatically shift how consumers discover and purchase products. If the partnership unfolds as planned, it will usher in a paradigm shift in shopping, moving away from conventional browser-based searches and embracing a conversational, AI-driven shopping environment.
Historically, online commerce has relied heavily on search engines, social media platforms, and digital ads to funnel traffic to online stores. Shoppers typically start with a Google search, scroll through product listings, compare prices across sites, and then navigate through checkout flows that often involve multiple clicks and forms. This process, while familiar, is fragmented.
The ChatGPT-Shopify integration could potentially create a seamless, in-chat shopping model. For instance, a user searching for the 'best running shoes' on a browser and clicking through 10 different links might switch to simply asking ChatGPT for a product recommendation. The bot would then suggest a curated set of products based on the query, user preferences, reviews, and possibly even previous interactions.
Most importantly, the user could complete the purchase within the chat interface, thanks to the 'check-out' part included in the public web bundle.
When AI connects buyers and sellers
What we are witnessing with this type of integration is an entirely new, personalised way of shopping that could fundamentally change user behaviour, provided the integration is successful and the user finds value in the chatbot's recommendations.
Also, in this model, ChatGPT will act as both the search engine and the storefront, blurring the lines between discovery, recommendation, and checkout. The bot's ability to play all these roles effectively will be put to the ultimate test, the result of which could disrupt the status quo in digital sales.
While consumers could find this method to be faster and more personalised, for merchants hosting their service through Shopify, the stakes are even higher. And this integration could transform Shopify from a website-creating platform for merchants into a marketplace-like ecosystem, instantly giving its millions of merchants exposure to ChatGPT's user base, without extra marketing or integration work.
This type of paradigm shift raises new challenges. Chief among them is visibility. For instance, if an AI chatbot acts as the new gatekeeper, how can brands ensure their products are featured? Would ChatGPT favour brands with more data, better reviews, or existing popularity, in effect reinforcing existing hierarchies as smaller or newer merchants may struggle unless AI ranking mechanisms are transparent and inclusive?
Moreover, as chatbots summarise product descriptions in their own words, brands may lose control over how their products are represented. This could dilute brand identity and force companies to rethink how they communicate their value proposition, optimising not for human readers, but for AI comprehension.
Despite these concerns, the broader trend is hard to ignore. As consumers grow more comfortable with AI tools and expect faster, more intuitive digital experiences, chatbot-based product discovery is poised to gain ground.
ChatGPT meets Google Search
To set the record straight, Google is still a colossal player in the global tech landscape with nearly 90% market share in the global search business. Alongside its search dominance, Google's advertising empire, bolstered by Google Ads, YouTube ads, and display ads, generates a significant portion of its income.
However, the shopping feature in ChatGPT represents a looming threat to Google's dominance in this space. If consumers increasingly turn to AI chatbots for product discovery instead of browsing Google's search results pages, the Internet giant could see a significant disruption to its core business model.
In a traditional search flow, users enter keywords into Google's search bar, explore links, compare products, and click on ads. Advertisers pay Google when their ad is clicked, driving much of its revenue. But, if ChatGPT becomes the preferred method of product discovery, users might no longer engage with Google's search engine as much for product searches. Instead, they could rely on the AI chatbot to instantly offer tailored product recommendations, complete with checkout options, without ever leaving the chatbot interface.
The result could be a decline in click-through rates (CTRs) on Google ads for e-commerce-related queries, as users skip over traditional search results in favor of chatbot-driven, frictionless shopping experiences. Furthermore, if users no longer click through to external websites, Google's web traffic funnel, which supports a vast majority of its ad business, could shrink.
Google's long game
Google acknowledges the shift in the market and is enhancing its AI capabilities through AI Overviews, Gemini upgrades, and other AI features. Its AI chatbot has now surpassed others in leaderboards, and the company is focused on becoming an integral part of conversational commerce. However, its ability to compete with in-chat shopping tools will depend on its ability to innovate swiftly enough to deliver personalized and seamless customer experiences that consumers increasingly expect.
While OpenAI's partnership with Shopify could potentially impact Google's search business in the near term, Google can easily mitigate this damage by leveraging its robust user data stack. This data stack, which spans search intent, behavioral, location, commercial, and contextual data, provides Google with a deep understanding of its users. This knowledge enables the company to predict demand, target ads, and train its own AI models for a more holistic user experience. Ultimately, Google's data stack could tip the balance in its favor in the long run.
On the other hand, ChatGPT lacks a data stack that can compete against Google's. Additionally, Shopify, unlike Amazon, is merely a platform for sellers to build digital tools. Since the platform doesn't sell products, its data collection is limited to enabling merchants sell, and it doesn't retain any customer data.
Given the nature of business Shopify is in, for OpenAI to compete against Google's search business with its Shopify integration, it must either own a browser or Shopify must become a sort of Amazon. Both of these changes are challenging to achieve.
In fact, OpenAI, in November, considered building its own Chromium-based web browser. According to some reports, the company even hired top Google engineers who were part of building Chrome for Google. It is unclear where that plan stands currently. But, the Sam Altman-led company's anxiety came to the fore on this theme in April when they expressed interest in buying Google's Chrome browser if the US Judge Amit Mehta orders the Alphabet-owned company to divest Chrome.