The Future of Retail in APAC: Insights from the Adyen Index 2025

Table of Contents

1. Key Highlights:
2. Introduction
3. The Role of AI in Retail Growth
4. The Convergence of Online and In-Store Shopping
5. The Rise of Purpose-Driven Retail
6. APAC as a Leader in Global Retail Trends
7. Conclusion
8. FAQ

Key Highlights:

• AI Integration: 38% of APAC consumers utilize AI for shopping, with retailers increasingly using it for practical solutions like fraud prevention and marketing.
• Hybrid Shopping Preferences: A significant number of consumers in Malaysia (57%) prefer a mix of online and in-store shopping, emphasizing the importance of flexible retail services.
• Purpose-Driven Commerce: A notable shift towards ethical consumerism is evident, with many shoppers expecting brands to engage in social issues, yet only a minority willing to pay more for ethically sourced products.

Introduction

The landscape of retail is undergoing a seismic shift, particularly in the Asia-Pacific (APAC) region, where consumers are not just adapting to digital transformation—they are actively rewriting the rules. The recently released Adyen Index: Retail Report 2025 offers a comprehensive examination of shopper attitudes and emerging business trends, highlighting the unique ways in which APAC markets, including Singapore, Malaysia, Hong Kong, Japan, and Australia, are crafting exceptional customer experiences. This article delves into the report's key findings, exploring the profound implications for retailers aiming to thrive in this dynamic environment.

The Role of AI in Retail Growth

Artificial intelligence (AI) is at the forefront of this retail evolution in APAC. The Adyen report reveals that 38% of consumers in the region are already leveraging AI to enhance their shopping experiences. This adoption contrasts with trends observed in other parts of the world, where AI often feels more experimental. In APAC, particularly in Australia, retailers are approaching AI with a pragmatic mindset. Over half of retailers are planning significant investments in AI technologies this year—not merely for innovation but to tackle pressing challenges such as fraud prevention, marketing optimization, and more efficient checkout processes.

In Hong Kong, for instance, AI is being employed to manage chargebacks and mitigate risks during peak shopping periods, underscoring its role as a vital business strategy rather than a mere novelty. However, consumer attitudes towards AI are complex. Australians, for example, top global concern rankings regarding AI-driven scams, with 35% expressing apprehension. Moreover, 43% find it invasive when retailers track their purchasing and browsing behaviors for personalized marketing. This presents a pivotal challenge: while AI offers transformative capabilities, transparency is crucial for fostering long-term customer trust. Retailers must clearly communicate how they utilize consumer data and the benefits it brings, whether through expedited service, personalized offers, or enhanced security for transactions.

The Convergence of Online and In-Store Shopping

Despite the rapid rise of e-commerce, in-store shopping remains integral to the consumer experience across APAC. The report highlights that 57% of Malaysian consumers prefer to shop using a hybrid approach—both online and in-store—marking the highest rate globally. In Singapore and Malaysia, loyalty is closely tied to retailers providing flexible services, such as online-to-store returns, with 59% and 66% of consumers respectively expressing preference for these options.

Even in markets like Japan and Australia, where online shopping continues to gain traction, nearly half of the shoppers still favor brick-and-mortar establishments. This highlights a significant trend: the blending of digital convenience with the tactile and experiential advantages of in-store shopping is reshaping consumer behaviors. Leading retailers are capitalizing on this trend by offering payment flexibility that enhances the shopping journey. A notable example is Love, Bonito, a Southeast Asian retailer that has partnered with Adyen to implement seamless cross-channel services. These include options for click-and-collect, omnichannel gift card redemption, instant credit returns, and endless aisle experiences, further integrating the online and offline shopping paradigms.

The Rise of Purpose-Driven Retail

A major shift emerging from the Adyen report is the transition from transactional commerce to purpose-driven retail. Modern consumers increasingly expect brands to take a stand on ethical and social issues, and this influences their purchasing decisions significantly. The report notes that 54% of Singaporean and 66% of Malaysian shoppers are more likely to remain loyal to retailers that demonstrate a strong social purpose or contribute to charitable causes.

However, this expectation comes with caveats. Only 37% of APAC consumers are willing to pay a premium for ethically sourced or locally produced products. While generosity is prevalent, with over 70% of consumers in markets like Hong Kong, Singapore, Malaysia, and Australia donating to charity—exceeding the global average of 65%—many prefer to contribute in ways that resonate with their values. For example, 52% of Hong Kong shoppers expressed that they would refrain from donating if it didn't align with their personal preferences.

This trend points to a broader societal shift: purpose matters to APAC consumers, but retailers must align their actions with the values they espouse. Authenticity in demonstrating commitment to social issues and providing convenient ways for consumers to engage with these initiatives are essential for fostering loyalty in this evolving market landscape.

APAC as a Leader in Global Retail Trends

The Adyen report illustrates that APAC is not just adapting to global retail trends; it is also setting the pace. A notable shift towards mobile and digital-first commerce is evident, with 31% of consumers opting to leave their wallets behind and relying solely on contactless payment methods. The adoption of digital wallets is exceptionally high in the region, with 56% in Hong Kong and 52% in Malaysia utilizing these services in the past year, significantly outpacing the global average of 30%.

Moreover, the APAC market is increasingly favoring a mobile-first approach, with consumers expecting integrated, frictionless experiences that seamlessly merge physical and digital interactions. This is exemplified by the rise of social commerce and the proliferation of super apps such as WeChat, Shopee, Gojek, and Grab, which are redefining what tech-enabled retail can look like. The convergence of these trends suggests that APAC is at the helm of a retail revolution, setting standards that resonate globally.

Conclusion

The findings from the Adyen Index: Retail Report 2025 reflect a transformative period for retail within the APAC region. As consumers continue to embrace AI, hybrid shopping experiences, and purpose-driven commerce, retailers must adapt their strategies to meet these evolving demands. The interplay between online and offline shopping, combined with a growing emphasis on ethical practices, is reshaping the landscape for businesses across APAC.

For retailers aiming to succeed in this environment, understanding these trends and implementing innovative solutions will be paramount. As the region leads the way in redefining customer experiences, the insights from the Adyen report serve as a crucial guide for navigating the future of retail.

FAQ

What is the Adyen Index: Retail Report 2025? The Adyen Index: Retail Report 2025 is a comprehensive analysis of shopper attitudes and retail trends in the APAC region, offering insights into how consumers are shaping the future of retail.

How is AI impacting retail in APAC? AI is driving significant growth in APAC retail, with many businesses investing in AI to enhance customer experiences, streamline operations, and address challenges like fraud prevention and marketing.

What are hybrid shopping experiences? Hybrid shopping experiences refer to a combination of online and in-store shopping, where consumers engage with retailers through various channels, benefiting from the convenience of digital tools while enjoying the tactile experience of physical stores.

Why is purpose-driven commerce important for retailers? Purpose-driven commerce is becoming increasingly important as consumers expect brands to take a stand on social and ethical issues. Retailers that align with these values can foster greater customer loyalty.

What trends are APAC consumers leading globally? APAC consumers are setting trends in mobile and digital-first commerce, with high adoption rates of contactless payments and digital wallets, as well as engaging in social commerce through popular super apps.