Despite a growing global wave of artificial intelligence (AI) transforming the e-commerce landscape, Filipino online sellers are notably hesitant to embrace the technology, placing the Philippines among the lowest in Southeast Asia for AI adoption.
A recent study conducted by e-commerce giant Lazada and international market research firm Kantar reveals a significant lag, primarily driven by concerns over cost, perceived utility, and a preference for familiar manual methods.
Study reveals stark regional disparities in e-commerce AI adoption
The February survey, which polled 1,214 online merchants across Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam, paints a clear picture of the region’s varying levels of AI integration.
While Thailand leads the pack with a robust 65% of sellers fully adopting AI, followed by Singapore (58%) and Vietnam (54%), the Philippines trails significantly with only 35% full adoption. Even in terms of actual AI usage in e-commerce, the Philippines’ 32% adoption rate sits behind Vietnam, Indonesia, Thailand, and Singapore, highlighting a critical gap in technological integration within the local online selling community.
Interestingly, the study indicates that Filipino vendors are more inclined towards specific AI applications like generative AI (37%) and AI chatbots (66%). This suggests an awareness of AI’s potential in content creation and customer service.
However, a significant hurdle remains: a staggering 53% of Filipino sellers harbor doubts about the overall value and utility of AI technology, breeding skepticism towards its implementation.
The perceived financial burden of AI is another major deterrent. Over half (55%) of Filipino merchants believe that adopting AI is both time-consuming and expensive. This concern is compounded by a strong preference for established workflows, with 67% of sellers expressing a reluctance to transition from the manual tools they are already comfortable using.
This resistance to change, coupled with cost anxieties, creates a significant barrier to widespread AI adoption in the Philippine e-commerce sector.
Despite infrastructure gaps, Filipino sellers show AI knowledge
The Lazada-Kantar report draws a parallel between the Philippines and Malaysia, noting that both nations exhibit a similar e-commerce pattern where infrastructural development in AI adoption lags behind areas like marketing, advertising, and customer service.
This suggests a need for targeted investment and support in building the underlying e-commerce infrastructure necessary for seamless AI integration.
However, the report also offers a glimmer of hope, highlighting that Filipino sellers possess a strong foundational knowledge of AI tools. This suggests that with the right support and accessible resources, the AI adoption gap in e-commerce could be bridged.
The key lies in addressing the cost concerns, demonstrating the tangible benefits of AI, and facilitating a smoother transition from traditional methods.
James Dong, CEO of Lazada Group, acknowledged this “intriguing vacuum” in Southeast Asia’s e-commerce landscape. “While a significant majority of sellers recognize the revolutionary potential of AI, many are still navigating the crucial step from awareness to practical application,” he stated.
Bridging the AI gap: Lazada introduces playbook, offers better seller support
In response to this challenge, Lazada is actively developing the “Online merchants Artificial Intelligence Readiness Playbook.” This initiative aims to provide merchants, regardless of their size or technical expertise, with the guidance and resources needed to embark on their AI adoption journey.
“As a leading e-commerce platform in Southeast Asia, we aim to bridge the knowledge and adoption gap by developing accessible AI solutions that address the unique challenges faced by sellers across different markets, ultimately making technology more accessible and driving sustainable business growth,” Dong emphasized.
During last year’s Lazada 11.11 Seller Conference, the company presented a number of game-changing technologies meant to help increase customer interest in online shopping. Carlos Barrera, Lazada Philippines CEO, also announced that the company has made revolutionary improvements intended to support sellers in their success.
“We recognize that things have moved quickly, so to lessen your workload, we are offering you a larger share of the discount,” Barrera shared during the event. “We would like to work together and split the investment.”
Meanwhile, the findings of this study serve as a crucial wake-up call for the Philippine e-commerce ecosystem. To remain competitive in an increasingly AI-driven global market, Filipino online sellers need support in overcoming their concerns about cost and utility, and access to user-friendly resources that demonstrate the tangible benefits of integrating AI into their operations.
Failure to address this lag could hinder the growth and competitiveness of the Philippines’ burgeoning online marketplace.