The retail landscape in Southeast Asia and Hong Kong is undergoing a seismic shift, driven by the accelerated adoption of Artificial Intelligence (AI). A
A recent survey by ABI Research reveals that over 90% of retailers are turning to AI to navigate increasingly complex supply chain challenges and optimize fulfillment operations. This surge in digital investment is fueled by rising consumer demands and the need for greater efficiency in material handling and management.
However, this transformation isn't without its hurdles. Data privacy concerns and the difficulty of integrating new technologies with legacy systems remain significant challenges.
"Data privacy concerns and difficulty upgrading or integrating with legacy systems are seen as the biggest challenges to improving workflows in retail companies," said Ryan Wiggin, senior analyst at ABI Research.
Retailers must prioritize robust data management and security strategies to overcome these obstacles, as noted in the research paper, Digital economy in Southeast Asia: challenges, opportunities and future development.
Cybersecurity is also a paramount concern, with over 35% of retailers planning to increase IT security spending significantly. This heightened awareness is driven by increasing cyber threats and evolving regulatory mandates.
"By collaborating among central banks and fintech players, and by standardising security responses, ASEAN can protect its ecosystem and ensure inclusive, resilient growth," says Vince Iswara, CEO of DANA Indonesia.
The opportunities are immense. AI agents are automating decision-making for tasks like inventory management and shipment routing, leading to greater agility and responsiveness, as noted by the 2025 Supply Chain Agility Index by Nucleus Research.
Drawing from the eighth edition of the joint survey by KPMG China and GS1 Hong Kong, titled “Beyond Retail in the Age of AI”, KPMG China's Anson Bailey observes, "AI holds the potential to transform the retail industry by enabling personalised shopping experiences and optimising supply chains".
Retailers are also focusing on creating "experiential" retail environments, integrating AI-powered experiences like gamified shopping and interactive product displays to enhance customer engagement.
To thrive in this evolving landscape, chief supply chain officers and chief operating officers must embrace a holistic approach. This includes investing in advanced digital solutions, prioritizing cybersecurity, and focusing on data management and security.
By addressing these challenges head-on, retailers can unlock the full potential of AI and create more efficient, resilient, and customer-centric operations.
