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With the rapid development of online e-commerce, traditional collaborative filtering algorithms have the disadvantages of data set reduction and sparse matrix filling cannot meet the requirements of users. This paper takes handicrafts as an example to propose the design and application of handicraft recommendation system based on an improved hybrid algorithm. Based on the theory of e-commerce system, through the traditional collaborative filtering algorithm of users, the personalized e-commerce system of hybrid algorithm is designed and analyzed. The personalized e-commerce system based on hybrid algorithm is further proposed. The component model of the business recommendation system and the specific steps of the improved hybrid algorithm based on user information are given. Finally, an experimental analysis of the improved hybrid algorithm is carried out. The results show that the algorithm can effectively improve the effectiveness and exemption of recommending handicrafts. What’s more, it can reduce the user item ratings of candidate set and improve accuracy of the forecast recommendation.