inventory planning, logistics, and loss prevention. At the same time, Southeast Asian consumers are becoming more discerning, placing increasing value on authenticity, reliability and consistency. “AI is fundamentally reshaping e-commerce in Southeast Asia by tackling the core challenge of operational efficiency,” George Pepes, Apac vertical marketing solutions lead, retail, Zebra Technologies, told Inside Retail. “As consumer demand for speed and accuracy grows, retailers are turning to AI-driven automation to manage complex fulfilment, reducing supply-chain errors by as much as 50 per cent, McKinsey research has found – and gaining real- time visibility from the warehouse to the customer’s door.” The industry is now confronting a structural tension: How to scale automation without eroding trust. AI adoption is accelerating, but execution remains uneven By most indicators, Southeast Asia appears ready for AI-driven retail. Awareness among sellers is high, confidence in AI’s potential benefits is widespread, and expectations around productivity gains and cost efficiencies are well understood. Yet beneath this optimism lies a gap between intent and execution. Lazada’s study, “Bridging the AI Gap: Online Seller Perceptions and Adoption Trends in Southeast Asia,” captures this contradiction clearly: three in four e-commerce sellers across Southeast Asia say they still require additional support to adopt AI effectively. While many believe AI is already embedded across a large share of their operations, measured usage across core retail functions, inventory management, logistics co-ordination, customer service, and demand forecasting remains substantially lower. This gap reflects a readiness issue rather than resistance to innovation. Sellers are experimenting with AI tools in isolation, often without integrated data foundations, governance frameworks or operational discipline. As a result, AI deployments frequently fail to deliver consistent outcomes. “AI has moved from a ‘wow’ factor to the baseline,” said Robert Woolfrey, VP, Asia Pacific and Japan, communications at Twilio. “Ten years ago, a chatbot was a novelty. Today, if a customer in Jakarta or Manila has to explain their problem twice because a bot didn’t pass the context to a human, you’ve lost them.” In Southeast Asia’s mobile-first markets, this distinction is critical. Customer journeys are inherently fragmented, often beginning on social platforms, continuing through messaging apps, and concluding on marketplaces or brand-owned channels. When AI systems fail to preserve context across these touchpoints, automation becomes a source of frustration rather than efficiency. Woolfrey argues that the greatest risk is not poor AI performance, but poor judgment around its limits. “The greatest risk for e-commerce brands lies in the erosion of trust caused by an overreliance on AI and automation. Since AI might fall short sometimes, seamless and easy access to human support will still be important,” he said. “One best practice to consider is that if the AI can’t resolve an issue in three exchanges, it should be able to hand off the full transcript to a human instantly. Additionally, as AI interactions become harder to distinguish from human ones, transparent disclosure of AI will help manage customer expectations in their interactions.” In markets where digital commerce often substitutes for physical retail infrastructure, that erosion can be swift and difficult to reverse. Operational discipline is becoming the real competitive battleground While much of the AI conversation in retail still centres on personalisation and customer engagement, the most consequential applications in Southeast Asia are unfolding deeper in the operational stack. “By 2026, the leaders in AI adoption won’t be defined by a single location, but by their ability to conquer specific market challenges,” Pepes said. “While Singapore is the region’s investment hub, the true battlegrounds for practical AI application are Indonesia, Thailand and Vietnam, thanks to their scale and digitally native populations. The companies to watch are the established giants that are using AI to optimise their massive logistics networks, and the disruptors that have mastered AI-powered ‘shoppertainment’ to drive customer engagement.” Brands can leverage AI for customer engagement, but it must start with operational reality. As Zebra Technologies “18th Annual Global Shopper Study” shows, retailers lose nearly US$1.7 trillion from inventory issues because their systems are disconnected. “True hyper-personalisation, therefore, isn’t just a creative front-end challenge; it’s a back-end data problem,” Pepes said. “The foundation of customer trust is using AI for real-time asset visibility and predictive forecasting, ensuring the products you promise are actually there.” The Zebra study also shows declining satisfaction in the Apac region because a seamless online experience is often broken by a disconnected back-end reality. Shopper satisfaction has declined for the second consecutive year, falling to 75 per cent for in-store experiences and 69 per cent for online experiences in the Apac region. The drivers of dissatisfaction are not abstract: out-of-stocks, inaccurate availability, locked merchandise, and delayed fulfilment. Nearly half of consumers across the region report leaving stores or online platforms without all the items they intended to purchase. In e-commerce, where influencer campaigns, livestreams, and AI-driven recommendations can generate sudden demand spikes, these failures are amplified. As a result, retailers are reframing AI not as a marketing accelerator, but as an operational stabiliser. Loss prevention illustrates this shift. Zebra’s research found that 87 per cent of retail leaders globally believe Generative AI and automation will play a significant role in loss prevention, with similar sentiment across the Apac region. Shrinkage, theft, and inventory inaccuracies are no longer treated solely as cost issues; they are increasingly recognised as threats to customer trust. This explains why 85 per cent of Apac retail decision-makers now prioritise real- time inventory synchronisation across channels. Technologies such as RFID, computer vision, and Generative AI are being deployed not to create novelty but to restore accuracy and predictability. “Ultimately, trust is built on reliability,” Pepes added. “By using AI to ensure every personalised offer is backed by verifiable stock and a dependable delivery window, brands build loyalty, consistently proving they can deliver the right product at the right time.” Authenticity, trust and human-led elements While retailers focus on strengthening execution, consumer behaviour across Southeast Asia is shifting in parallel. Cube Asia’s “Rise of Authenticity-Driven E-Commerce” report identifies sustained growth in transactions centred on authenticated products, official brand stores, and verified retail environments. Over the past five years, this segment has expanded steadily and is projected to account for more than half of Southeast Asia’s e-commerce value by 2030. Consumers are increasingly willing to pay premiums – often between 10 and 30 per cent – for genuine products backed by reliable fulfilment and after- sales support. In markets such as Thailand and Vietnam, engagement with official brand stores has become mainstream rather than niche. Authenticity has emerged as a mechanism for risk reduction in a complex digital marketplace. This dynamic is particularly visible in influencer-led commerce, one of the region’s fastest-growing channels. If operational reliability is the backbone of trust, influencer marketing remains its emotional engine. And nowhere is the region’s struggle with authenticity more visible. Influencer marketing budgets continue to rise even as global advertising spend tightens. Brands are doubling down because it works, but for years, they have struggled to explain why. “Influencer marketing used to be a guessing game,” Sega Cheng, co-founder of iKala, said. “AI is turning it into a predictable revenue channel.” Cheng argues that the industry’s historic obsession with follower counts and engagement rates obscured what mattered: whether an influencer could drive real purchasing behaviour. With AI, brands can now analyse creators at scale, examining content quality, audience sentiment and historical conversion performance, rather than vanity metrics. “We see a lot of creators now using AI for editing and for generating images and scripting videos, allowing them to maintain a high volume of professional- grade content, such as unboxing videos and product demonstrations,” he added. For a brand, this means more high-quality retail touchpoints without sacrificing authenticity. Yet Cheng is careful not to oversell the technology. “First off…AI can never truly replace human judgment in influencer marketing; at best, it can augment and improve decision-making,” he said. That distinction matters because the currency of influence remains authenticity – something algorithms can detect, but not manufacture. The danger, Cheng warns, emerges when brands lean too heavily on automation. Over-reliance on AI-generated captions, scripted messaging or rigid content frameworks risks flattening a creator’s voice and eroding credibility with followers. The most effective brands, he argues, use AI to support decision- making, creator selection, performance measurement, and optimisation, while keeping storytelling and creative direction firmly human-led. This balance reflects a broader truth about Southeast Asia’s e-commerce ecosystem. AI can reduce friction, improve accuracy, and coordinate complexity. What it cannot do is manufacture credibility. AI as a game changer for smaller brands Smaller brands in Southeast Asia are discovering that AI isn’t just a tool, it’s a way to outsmart the e-commerce giants. By 2026, agentic AI systems are expected to go beyond passive recommendations, actively guiding shoppers to explore, evaluate, and narrow choices across increasingly complex digital marketplaces. “AI has the potential to meaningfully level the playing field for smaller and regional brands,” Szi-Wei Lo, executive MD, Apac at Criteo, told Inside Retail. “It helps challenger brands reach the right shoppers at the moments that matter most, allowing them to compete not on scale, but on relevance, timing, and precision.” The real power comes when AI is paired with advantages smaller brands naturally possess: deep local knowledge and a physical store footprint. Pepes explains: “Smaller brands must use AI to outsmart the giants by weaponising their two key advantages: deep local knowledge and their physical store footprint.” Zebra’s 18th Global Shopper Study reinforces this approach, showing that while 81 per cent of shoppers are influenced by discounts, true value is defined by relevance. “With AI, smaller brands can scale intimacy, creating hyper-relevant promotions tied to local culture, opportunities that global platforms often miss,” Pepes added. “It allows them to compete on authentic connection, not just price.” AI also transforms physical stores into agile, hyper-local fulfilment hubs. Real-time inventory visibility, combined with a connected frontline of associates, enables faster click-and-collect and more personalised service. This combination of insight, timing, and operational agility shifts the competition away from the giants’ strengths of price and scale, toward smaller brands’ natural advantages: speed, relevance, and connection to local communities. Lo emphasises that AI doesn’t just optimise execution, it expands opportunity. “By identifying high-intent shoppers during key retail events, such as major double-day sales, brands can engage consumers early in the discovery phase, building familiarity and consideration well before the point of conversation,” Lo said. “It allows smaller brands to respond quickly to shifting consumer behaviour, optimise spend in real time, and drive sustainable growth without the operational complexity of larger organisations.” In addition, in a region with high digital adoption, like Southeast Asia, AI can help connect fragmented markets, enabling brands to anticipate consumer demand and facilitate smoother cross-border purchasing experiences. As shoppers increasingly navigate between platforms, marketplaces, and countries, AI will allow brands to identify these cross-border consumers and present relevant products based on intent, context, and location. This reduces friction in product discovery, localisation, and conversion, making cross-border shopping more seamless and accessible. “Brands that embrace this shift will operate in a more integrated digital landscape, where AI supports discovery, builds brand familiarity, and drives conversions across multiple markets simultaneously,” Lo said. “In doing so, AI will not only fuel regional growth, but also meet rising consumer expectations for relevance, convenience and consistency across Southeast Asia’s diverse commerce landscape.” The quiet conclusion The real lesson for Southeast Asia’s retailers is not that AI must be more powerful, but that it must be more disciplined. When AI works, it fades into the background. Shoppers do not notice algorithms or automation. They notice that products arrive as promised, that recommendations make sense, that conversations carry context, and that influence feels earned rather than manufactured. Across customer engagement, influencer marketing and operations, the same truth is emerging: AI does not create trust; it reveals whether trust already exists. “Success won’t be defined by who has the most sophisticated models, but by who uses AI to expand the ecosystem and meet shoppers wherever intent arises,” Lo noted. In a region defined by scale, diversity and rapid digital adoption, the retailers that win will not be those that deploy the most AI, but those that use it to keep their promises consistently. In Southeast Asia’s next phase of e-commerce growth, reliability may prove to be the most powerful technology of all. This story first appeared in the February 2026 issue of Inside Retail Asia magazine.