Artificial Intelligence: Promise and Risks

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AI is reshaping commerce and payments but adoption remains fragmented. As of early 2025, Lazada Group reported that half of Southeast Asian sellers were still in the aspirational phase, while only one-quarter had achieved full integration. Costs, expertise gaps, and technical barriers continue to slow adoption.

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Self-reported use often exaggerates progress. Thailand, Indonesia, and Singapore had the largest share of “AI Adepts,” while Malaysia and the Philippines showed greater skepticism. Vietnam and Indonesia demonstrated strong intent but weaker execution.

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Fraud is a growing concern. AI-driven scams — including synthetic identities and deepfakes — are surging in Singapore, Thailand, and Indonesia. Financial institutions use AI-powered analytics and graph tracing, though high false positives remain a challenge.

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Governments are promoting responsible AI. Since 2016, regulatory sandboxes and innovation hubs have emerged across Asia. By 2025, Singapore’s PET and GenAI sandboxes, South Korea’s regulatory centers, and Malaysia’s SME initiatives are serving as models. Nonetheless, uneven governance across Southeast Asia limits progress, requiring tailored national approaches.

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From Cards to Wallets: Payments Evolution

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By 2027, Asia-Pacific is expected to capture nearly half of global payment revenue, according to McKinsey & Company, with non-cash transactions projected to hit 1.5 trillion annually by 2028. B2B non-cash payments are also rising, forecast to surpass 65 billion, per Capgemini Research Institut.

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At the consumer level, digital wallets and instant transfers are overtaking traditional cards. China leads with WeChat Pay and Alipay, where mobile wallets dominate daily transactions through QR codes, biometrics, and super-app features.

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Other markets follow varied paths. Japan remains card-heavy but is advancing toward cashless transactions. South Korea sustains growth in card payments with strong contactless infrastructure, while Australia is seeing rapid wallet expansion and high BNPL use among younger consumers.

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In Southeast Asia, cards remain important, yet wallets are growing quickly, especially in Singapore. BNPL is booming in Indonesia and the Philippines, while real-time transfers and subscription models gain traction. Regulation evolves in parallel: Hong Kong prioritizes localized compliance, while providers like Nuvei deploy AI-based fraud detection to meet licensing standards across regions.

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Asia-Pacific B2C E-Commerce: Scale and Cross-Border Growth

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Asia-Pacific’s retail E-Commerce sales are projected to approach USD 5 trillion by 2028, confirming the region’s dominance in global commerce, according to eMarketer. China continues to anchor growth, with its vast internet base and high share of online retail sales by early 2025. E-Commerce is firmly embedded in national consumption patterns.

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Southeast Asia is becoming a major growth driver. Markets such as Indonesia, Thailand, Vietnam, Malaysia, the Philippines, and Singapore are experiencing strong expansion, supported by mobile-first adoption and improving logistics.

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Cross-border trade is equally transformative. China leads global cross-border E-Commerce, far ahead of Western markets. Japan, South Korea, and Australia remain top source markets for Chinese shoppers. Luxury E-Commerce is maturing as many consumers now purchase designer goods online without physical inspection, reflecting deep trust in platforms.

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Social commerce strengthens this ecosystem. WeChat, Douyin, and Instagram enable live-streaming, influencer-driven sales, and seamless checkouts, boosting engagement and conversion. Policy dynamics also play a role: in 2025, Alibaba and JD.com adjusted to U.S. tariffs by focusing on domestic resilience and logistics investment.

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B2B E-Commerce: Platforms and Integration

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Asia-Pacific’s B2B E-Commerce is expanding rapidly through digital procurement, platform growth, and stronger supply chains. Cloud adoption has accelerated digital transformation, improving operational efficiency and increasing trust in large-scale online transactions.

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China retains the largest B2B market, while India is experiencing exceptional growth, particularly in cross-border segments. Marketplaces drive this momentum: in China, AliExpress, 1688.com, Tmall, DHGate, Global Sources, and Made-in-China dominate procurement. In India, IndiaMART, TradeIndia, and Udaan lead SME access, while Japan’s MonotaRO and ASKUL enhance supply chains through data-driven tools.

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Cross-border platforms are vital for SMEs, supported by partnerships with payment providers and AI-driven procurement solutions. This fusion of trade, technology, and finance is reshaping regional B2B commerce.

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Asia-Pacific’s Digital Commerce: Global Blueprint

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Asia-Pacific in 2025 remains the most dynamic global commerce hub. B2C growth is driven by China’s scale, Southeast Asia’s acceleration, and the rise of social commerce. Payments diversify through wallets, BNPL, and real-time transfers. AI adoption expands but faces operational and fraud-related hurdles. B2B platforms scale quickly, enabling SMEs and corporates to transact digitally with greater efficiency.

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The interconnected evolution of retail, payments, AI, and B2B trade highlights the region’s complexity and opportunity. Asia-Pacific continues to act as a blueprint for the future of global digital commerce, with firms balancing innovation, compliance, and resilience best positioned to thrive.

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