In its 2025 Annual Retail Report, global fintech platform Adyen reveals a sharp rise in AI adoption among Asia Pacific (APAC) consumers and retailers, highlighting a significant shift in shopping behaviors and business strategies across the region.

The report, based on a survey of 41,000 consumers across 28 markets including Singapore, Australia, Hong Kong, India, Japan, and Malaysia, underscores how the tech is reshaping the retail experience and signaling broader trends for the region’s digital economy.

According to Adyen, over a third (38 per cent) of APAC consumers now use AI to assist with shopping—a 39 per cent increase from 2024. Notably, more than one in ten APAC consumers (11 per cent) tried AI-powered shopping for the first time in the past year.

The appeal of AI lies largely in its ability to offer fresh inspiration and personalised recommendations. Nearly two-thirds (63 per cent) of AI-using consumers said it helps them discover new choices for everything from outfits to meals faster than any human assistant could.

Additionally, 62 per cent expressed interest in using AI to find unique brands and shopping experiences, opening doors for retailers to drive sales through partnerships and cross-selling strategies.

Cross-generational adoption

While younger generations remain at the forefront of AI shopping, older cohorts are quickly catching up. In Malaysia and Hong Kong, Gen Z adoption stands at 74 per cent and 64 per cent, respectively.

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Meanwhile, Singapore’s Generation X and Millennials have shown substantial growth, with AI shopping adoption increasing by 45 per cent and 28 per cent respectively over the past year. Even among consumers aged 60 and above, nearly a third (30 per cent) reported using AI to assist with purchases.

“The introduction of AI in shopping has created new shopper journeys that are more exciting than ever,” said Warren Hayashi, President of Asia Pacific at Adyen. “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”.

On the business side, more than a third (34 per cent) of APAC retailers plan to increase their AI investments in the coming year to enhance sales, marketing, product innovation, and security. Payments data — a largely untapped resource — presents significant potential for AI-driven optimisation.

While AI garners attention, the report also points to gaps in omnichannel capabilities. Less than half (46 per cent) of APAC retailers currently support seamless cross-channel shopping, though another 19 per cent plan to enable this within the next year.

Consumer expectations are evolving quickly: 46 per cent want businesses to offer integrated experiences across online platforms, social media, and physical stores. Despite the rise of digital commerce, 42 per cent of consumers still value in-store shopping equally alongside online channels.

As the region’s retail landscape continues to digitise, AI is emerging not only as a tool for personalisation and convenience but also as a strategic differentiator for retailers navigating an increasingly competitive market.

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Balancing innovation with security concerns

Despite enthusiasm for AI, concerns around fraud persist. About 26 per cent of consumers expressed heightened worries about scams, and 20 per cent avoid storing payment details on devices for security reasons. Currently, 40 per cent of APAC retailers are leveraging AI to combat fraud by detecting anomalies and predicting fraudulent activities using their transaction data.

“Besides optimising revenue, AI could aid in the fraud-fighting efforts of retailers,” Hayashi noted. “It can spot anomalies, identify patterns, and predict fraud attempts – ultimately ensuring consumer trust and protecting retailers’ hard-earned revenue”.

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