

The rapid advancement of Artificial Intelligence (AI) has transformed global e-commerce, with AI-driven personalization emerging as a pivotal strategy for enhancing customer experience and boosting sales performance. This study investigates the implementation and impact of AI personalization in Iran’s online fashion industry through a case study of Modiseh, one of the country’s leading e-commerce platforms. Utilizing a qualitative research approach, data were collected through semi-structured interviews, content analysis of the platform, and internal performance metrics. The findings reveal that AI-enabled recommendation systems and real-time personalization significantly improved user engagement, conversion rates, and average order values. Moreover, the integration of AI fostered internal operational efficiencies and cross-functional collaboration within the firm. Despite these benefits, the study identifies ongoing challenges such as algorithmic bias, data quality issues, and user concerns over privacy. By contextualizing AI adoption within Iran’s socio-cultural and regulatory environment, this research offers practical implications for local retailers and contributes to the broader discourse on digital transformation in emerging markets.