APAC Retailers Embrace AI Amid Shifting Consumer Preferences

New research from Adyen reveals significant shifts in consumer habits in Asia-Pacific as artificial intelligence becomes increasingly integrated into retail transactions and decision-making processes.

The 2025 Annual Retail Report by Adyen examined the behaviour of 41,000 consumers across 28 international markets, including key locations such as Singapore, Australia, Hong Kong, India, Japan, and Malaysia. According to the findings, over a third (38%) of APAC consumers now use AI to assist with shopping. This represents a 39% increase compared to the previous year, with more than one in ten (11%) utilising AI for shopping for the first time during the past 12 months.

The report finds AI is perceived positively by users. Nearly two-thirds (63%) indicated that AI helps inspire their purchase decisions, whether for clothing or meals, at a faster rate than other sources. In addition, 62% expressed a desire to use AI to discover unique brands and new shopping experiences, creating opportunities for brands to drive sales through partnerships and cross-selling.

Adyen's research also noted that 59% of APAC consumers are open to the idea of making purchases using AI in the future.

The adoption of AI is evident across generations. While Generation Z leads in usage—particularly in Malaysia (74%) and Hong Kong (64%)—older groups are showing increased engagement. In Singapore, Generation X and Millennials registered the sharpest rises in AI-powered shopping over the past 12 months at 45% and 28% respectively. The report also found that 30% of those aged 60 and above are currently using AI to support their shopping decisions.

Warren Hayashi, President, Asia Pacific, Adyen, said: "The introduction of AI in shopping has created new shopper journeys that are more exciting than ever. From it, we see an emergence of new consumer behaviors — one characterized by personalization and convenience. For retailers, embracing AI isn't just about staying current; it's about meeting evolving consumer expectations and staying competitive in a fast-changing retail landscape."

AI is also being viewed as a tool to drive business growth. When asked about strategies for boosting revenues in 2025, more than a third (34%) of APAC retailers identified increased investment in AI to support sales and marketing, product innovation, as well as security and fraud prevention.

Hayashi further commented: "Retailers generate vast amounts of payments data through their daily operations, presenting a substantial untapped opportunity. Where AI comes into play is to drive conversions at scale. Building on this potential, we recently launched an AI-powered payment optimisation solution called Adyen Uplift. By training AI on all of the transactions Adyen processes, we help retailers identify genuine shoppers at scale, and fly them through checkout securely and with minimal friction."

Concerns over fraud remain pronounced. The report noted that one in three consumers across the region have experienced fraud involving account takeover, identity theft or social engineering. For businesses, the resulting losses from such incidents averaged over SGD $3 million during the last 12 months. The growing prevalence of AI in commerce has heightened consumer unease; 26% of APAC consumers reported increased concern regarding fraud and scams, and one in five avoid enabling their devices to remember payment details because of these fears.

Hayashi addressed these issues, explaining: "Besides optimizing revenue, AI could aid in the fraud-fighting efforts of retailers. By training AI on the thousands of transaction data retailers process each day, it can spot anomalies, identify patterns, and predict fraud attempts – ultimately ensuring consumer trust and protecting retailers' hard-earned revenue." Currently, 40% of regional retailers use AI to assist in fraud prevention.

Despite a push for digital solutions, APAC consumers continue to value physical stores. The report cites that while 36% of consumers in the region shop via social media, and 46% expect the ability to purchase across various digital touchpoints, physical presence is still important. Forty-two percent prefer both physical and online channels equally, with a further 35% favouring traditional brick-and-mortar outlets. The opportunity to see and feel products (48%), try them on (41%), and take items home immediately after purchase (35%) are the top reasons cited for this ongoing preference.

The report also highlights that less than half (46%) of APAC retailers currently offer streamlined omnichannel experiences, though an additional 19% are planning such investments over the coming year.

Social responsibility is another theme. A growing segment of APAC consumers now favours retailers with a strong social purpose and charitable initiatives. Correspondingly, 30% of businesses in the region are investing in social impact causes.

The research, conducted by Censuswide, involved both consumers and merchants, applying standards set by the Market Research Society and ESOMAR. The data was collected in early 2025, reflecting the most recent trends in technology-led transformation within the retail sector.