Singapore has digital foundation for an AI-ready e-commerce sector
ARTIFICIAL intelligence (AI) – and more recently, generative AI – is changing the way businesses grow, engage customers, and operate. In the retail sector alone, AI is projected to generate between S$400 billion and S$660 billion in annual value globally, transforming everything from product discovery to customer service.
Singapore has laid a strong foundation to lead in this AI-driven future. With strong digital infrastructure, a forward-thinking Smart Nation strategy, and robust policy support, the groundwork for AI adoption is already in place. Core sectors such as logistics and retail – both critical to e-commerce – are beginning to see the benefits of this transformation.
Yet, there appears to be a disconnect between Singapore's readiness and actual implementation within the e-commerce industry. Despite substantial advantages, online sellers in Singapore remain surprisingly modest in their AI implementation, which signals a strategic vulnerability in this rapidly evolving digital economy.
Sellers believe in AI, but adoption is lagging
Our latest Lazada research highlights this perception-action gap clearly: while 93 per cent of Singapore sellers believe that AI can improve productivity and lower costs, actual implementation tells a different story. Sellers claim an average of 48 per cent AI adoption rate – but in practice, that figure is closer to 38 per cent.
This gap stems from a practical challenge: many sellers are interested in using AI but do not know how to get started. Barriers such as implementation costs, limited technical expertise, and the complexity of integrating AI into daily operations make adoption difficult.
However, the most critical gap is not due to a lack of technology or tools available but in operational enablement – the ability to connect technological potential to address different business challenges, which small businesses experience most acutely. While Singapore offers numerous support mechanisms through grants and platform tools, these resources only address part of the challenge. Practical enablement remains essential to help businesses move from potential to action – a strategic and critical shift as consumer expectations continue to rise.
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Consumer expectations – the driving forces of AI adoption
South-east Asian consumers today are not passively waiting for businesses to catch up, they are seeking enhanced digital experiences. In fact, across South-east Asia, 83 per cent of shoppers are already willing to pay more for AI-enhanced experiences – such as personalised recommendations, faster response times, or more intuitive interfaces.
As these expectations solidify, sellers that are enabled by AI will gain a competitive advantage or be rewarded over time with customer choice and loyalty.
As e-commerce sellers across South-east Asia grapple with how to adopt AI meaningfully, it is worth looking at markets that have already made that leap. One of the most instructive examples is China, a market that just a decade ago faced many of the same structural and operational challenges that are now common in South-east Asia.
Both regions share a platform-based e-commerce model, mobile-first consumer behaviours, and a high concentration of small and medium enterprises (SMEs) navigating digitalisation with limited technological resources.
What catalysed China's transition from basic digital storefronts to AI-powered e-commerce was not merely technological availability and scale, but strategic implementation approaches.
Platforms such as Taobao and Tmall recognised that sellers needed operational pathways to AI adoption, which came through in phased tool roll-outs and guided platform-integrated capabilities that allowed sellers to implement AI incrementally across their operations.
This approach of meeting businesses at their level of readiness rather than expecting them to bridge the technical gap independently offers a valuable lesson. With a strong infrastructure already in place, Singapore is well-positioned to enable the next wave of AI adoption, especially among SMEs that form the backbone of the digital economy.
Creating a collaborative blueprint in the eCommerce ecosystem
Singapore has already laid the groundwork for addressing this implementation challenge. Initiatives such as SMEs Go Digital provide crucial funding access and pre-approved solutions that significantly reduce adoption barriers.
Complementary efforts such as SkillsFuture's TechSkills Accelerator demonstrate recognition that technical upskilling must extend beyond IT specialists to encompass entrepreneurs and business leaders who drive adoption decisions.
To make real progress, we need to go beyond just tools and policies. Success in AI adoption will depend on closing the knowledge and adoption gap to ensure that sellers across the region can grow sustainably and competitively.
This requires continued collaboration across platforms, policymakers, and industry associations, each playing a distinct role in enabling progress, to make tools simpler, training more practical, and resources easier to navigate.
In my role, I have seen firsthand how structured guidance and practical support – from intuitive AI tools to integrated training support – can make adoption easier for sellers of all sizes.
Sellers, too, have an important role to play.
AI adoption doesn't require dramatic or overnight transformation, but small, steady steps: trying out available tools, seeking out training opportunities, and investing in small but continuous efforts to build internal AI capabilities.
Upskilling does not have to happen all at once. Even incremental steps, such as automating routine tasks or experimenting with AI-powered product tagging, can lead to lasting change.
The convergence of stakeholder efforts will be the crucial link between Singapore's world-class digital infrastructure and seller-level AI implementation. Today, AI is no longer a distant ambition. It is fast becoming the cornerstone of e-commerce.
Sellers who integrate AI to improve how they operate and serve customers will be the ones to lead the next wave of growth, and those who enable them – through intuitive tools, relevant training, and accessible support – will be the architects of a more competitive, inclusive, and resilient digital economy in South-east Asia.
The writer is chief technology officer of Lazada Group
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