- 6 hours ago
Malaysians are ahead of the curve in AI-driven shopping! Adyen’s latest report reveals that consumers in Malaysia surpass the global average in using artificial intelligence for smarter purchases. Join Ibrahim Sani on The Economy with special guest Soon Yean Lee, Malaysia Adyen Country Manager, as they explore what this trend means for businesses and shoppers.
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00:00Thank you for joining us. This is The Economy with me, Ibrahim Sani.
00:12Let's take a look into AI or Artificial Intelligence and how it is shaping payments and transactions online.
00:19Very recently, Aden Payments have just issued a report showing that 58% of Malaysians now use Artificial Intelligence to shop surpassing global average.
00:29This may come as no surprise to our audience. It's also trying to understand a little bit better in terms of why this situation is currently happening
00:38and at which segment and sector that is most impacting and how does this relate to you?
00:44And perhaps how can you leverage on this trend and see how you can grow your own enterprises and businesses together?
00:51Joining me is none other than a good friend of the show, Lee Sun Yan, the Country Manager of Aden Malaysia.
00:58Let's talk a little bit more in terms of the report that we just saw.
01:04It shows that Malaysian shoppers are increasingly embracing AI and this is well ahead of the global average where only 37% of consumer reports using AI in their shopping journey against 58% of Malaysians.
01:21That's nearly a third.
01:22Yep.
01:23So what classifies the concept of using AI to shop? Let's start off with that first.
01:29Yeah. I think before we talk about how AI is helping, right? Maybe we take one step back and say what do consumers want?
01:36At the end of the day, consumers, they're out there shopping and you think about given the current situation with economy, there's a bit of pressure in terms of spending.
01:45People tend to be a bit more diligent. They want to be more informed. They want to have choices.
01:51So, and you fast forward it back to now, right? What happens is what are the tools out there that would help them in order to make that decision?
02:00And when we think about it, yes, it used to be a Google search. It used to be surfing through different mobile apps or different brands and all.
02:08But now with AI, it's much more convenient because the tools actually help them do what they've been doing manually and cut through all the noises, cut through all the sales biases, all the advertising and all.
02:21And it's because it's AI, right? It's artificial intelligence. It is able to do more than just taking an instruction.
02:29It is actually understanding what the user is asking for and is actually prompting questions to find out more what do you want to know about this product and able to present it back to the consumer in a much more informative way, much more meaningful way that they can make a decision.
02:47That can be very, very enticing for a consumer because it cuts down my time. It also helps me filter through all the noises.
02:54You know, I attended the CES, the Consumer Electronics Showcase in Las Vegas in 2015, maybe 2016, close to 10 years ago, if not 10 years ago.
03:04And the Consumer Electronics Showcase at that point in time shows brands like Samsung, like Sharp and the like.
03:16They say that the fridge will never be empty, quite literally. So if the fridge is smart enough to know that, you know, you buy staples like milk, eggs and which type of eggs and what brand of milk that you like and so on.
03:32When the level goes low, the process is that it gets replenished accordingly.
03:41And, you know, you just need to buy the vanity products or the items that you might not necessarily use on a daily basis.
03:47And it was revolutionary 10 years ago. Have we arrived at that stage in 2025 where people just, you know, whatever that they need is already there because of the AI enablement?
04:00So from the report, what the consumers are telling us, right, more than half of them are actually using AI tools or AI chatbots to do the assistance on it.
04:10But if you think about it, you and me as a consumer, we're still prompting them. We're still having conversations.
04:16But what the market is doing now, what we see is that eventually something called agentic commerce is going to come into play whereby it's a new channel.
04:26We talk about what happened in the past whereby first we have physical stores and then online shopping came and then marketplaces like Lazada and Shopee came.
04:35And then brands started building their own mobile app to engage with the customer better.
04:39These are basically all different sales channels that interact with consumers in different way, but not necessarily different.
04:47They are serving them, right? They're serving them. They are actually serving the purpose that the consumers are looking for.
04:52I'm trying to find a certain product. I'm trying to find it at the best offer. I'm trying to make sure that I can check out and get the products in the way that I want.
05:01Either I'm going to go into the store to buy it and try it or I'm going to buy online and have it delivered to my house at my, whichever convenience I'm looking for.
05:10I'm assuming agentic commerce is actually an extension or a subset of agentic AI where artificial intelligence tools can actually set goals, set directions, step-by-step processes with minimal human intervention.
05:23So it's part of that.
05:25So eventually it's going to get to this other sales channel whereby if you see a lot of people interacting with the chatbots, then companies want to think about, hey, how do I bring that shopping process into that chatbot, right?
05:38So that's where agentic commerce will happen, regardless of what platform a consumer is using.
05:45It could be different AI tools. It could be AI tools that's provided by the retailer brands themselves, but they will try to complete the transaction within the same channel.
05:55How do we address skepticism and suspicion on the backdrop of hallucination as well?
06:06And while we understand that the tools are there and the remarkable efforts that it can achieve, there's still a huge element of, it's not distrusting AI.
06:17It's like I want milk, but the AI assistant goes and buys me goat milk instead of cow milk. It's these kind of things.
06:27It is. I recall one of the movies whereby an AI robot became a caregiver in the house and the owner actually tweaked a bit of the settings to give them more autonomy, right?
06:39They ended up making decisions that the owner didn't want.
06:42So I think, but that's fiction, right? But again, this is possible if it's not managed properly.
06:48So I would say if consumers and businesses are embracing AI, so would fraudsters and scammers as well.
06:55So this is a technology for all. So again, I think what businesses need to do is to ensure that they don't just 100% outsource it to AI to handle the things.
07:05Businesses need to continue to be in control. So take for example, if between you and me, there's a agent, AI agent that's doing the communication, right?
07:18As a business, I want to make sure that I do not lose that relationship with you. I still need to know what are your preference.
07:24I still want to be in communication with you. So again, there needs to be a framework around this.
07:31The other part is also when handling payments, right? If you talk about the example of the fridge and if that fridge is connected to Amazon,
07:39so it's going to do the order for you. And the next day you see this fresh milk being delivered to your house and all.
07:46You're giving a lot of autonomy to the AI agent to do all these decisions for you.
07:53So again, I think there needs to be a framework. So businesses need to know that whatever framework they're building
07:58or whatever AI initiative they're doing, they need to continue to ensure that they are providing consumers the trust.
08:05They are still in direct relationship with the consumers and they are still in control in terms of how they want to serve the customer.
08:12The AI tools that they're using is just a means of enabling it in a much better way.
08:19So I guess the payments aspect is also a tool to achieve those means and will be integrated in the process.
08:30If you talk about agentic commerce, it's just part of step number 10 or whatever inside the whole value chain.
08:37And in the whole value chain, I think payments sometimes really underrated, but payments is the most important piece.
08:43Mainly because if I have decided to buy something, I am at the checkout page, I'm lining up at the counter.
08:50It means that I've decided. The only thing that's standing between me and that product is a failed transaction or a failed payment.
08:59So again, payment is important, right? I think from the research as well, we found that consumers say there's more than half of them actually say that they will actually drop off if the checkout process takes too long.
09:14I'm one of them.
09:15Yeah, me as well even, right?
09:17I mean, we're rational consumers, I suppose.
09:21We've seen what other companies, many companies in the market are capable of.
09:25So the moment the other company is behind, we know there's something better.
09:29So that's where the expectation is.
09:31The speed of things is important.
09:33The loading, even the loading page in your website, if it loads too long and eventually become a red colour decline, it's also not good for experience.
09:41I think most of them say that, hey, if it's taking too long or I can't pay in the way that I want.
09:48For example, one day I decided to use Touch&Go, the other day I decided that I'm going to use my credit card because of points.
09:54If those options are not available, they are very likely to drop off.
09:59Let's take a look into consumer behaviour changes.
10:03At the turn of the century, people were very highly sceptical and suspicious of checkout counters online.
10:11I still remember, in my early days of university, being a university student, we had a more laissez-faire attitude and we just adopted the kind of payments online.
10:22And, you know, pioneer websites like Mudah and Lelong and the like were the first movers in terms of integrating payment systems on their user interface for us to interact with.
10:38That has long gone. I think our people are now very comfortable with online payments and then with payments like Apple Pay and the like with biometric verification.
10:51It's rather seamless and highly secure, much more secure than carrying cash in your wallet and walking around with it.
10:56Yeah.
10:57But it took some time for the consumers to actually adopt that.
11:01But considering that that number in Malaysia, 58%, which means more than half or at least close to a third now, two thirds now.
11:11Is Malaysia as a society adopting AI, not just for commerce and payments, but is adopting AI much faster and less friction compared to other markets?
11:22Yeah, indeed. I think from the survey, it does show that our average is higher than the whole APEC, all the countries in APEC that we actually surveyed.
11:33So that says one thing, right, which is we are very tech savvy consumers, not just consumers, but on our day to day, right?
11:40Take for example in China, there was an example whereby they skipped the whole evolution of going into a computer, right?
11:47They went straight to the mobile. So I think in many countries.
11:51I think in Africa as well.
11:52Indeed, indeed. Yeah.
11:53Yeah.
11:54Because it's much more easier and then the tech actually got imported in, right?
11:58Yeah, they skipped the laptop and the iPad and went straight to mobile.
12:01So in Malaysia, I think when we go through adversary, then we're going to evolve, right?
12:06So imagine through the whole lockdown days, whereby things were hard, right?
12:10We moved from paying cash to QR codes. We pivoted very fast.
12:16So I think the moment you're put into a situation whereby there are better solutions and people are embracing it, it will move very fast.
12:26But that depends on three parties, right?
12:28One, of course, is the consumer themselves. They have to continue educating themselves, right?
12:33When we talk about Muda, once you met a few more sellers, then you know how to do your due diligence much better, right?
12:40The businesses, right? What kind of infrastructure they are doing to ensure that the safety and security is there, the trust is there, right?
12:48The PDPAs and all. And then the other thing we say also government played a very big part in terms of pushing digital payments, putting out framework.
12:56We talk about scams. They have set up committees and also hotlines and all.
13:02It requires the whole ecosystem to move together. And we came a long way from where we were like 10, 15 years ago as a nation when it comes to digital payments.
13:12And it's going to continue to evolve even better.
13:15The way I look at it is the next two areas of growth when it comes to digital payments and AI assistance in terms of how we consume products would be big ticket items that involve, say for instance, governmental ministries and large corporates where they can transact billions of ringgit in a single transaction.
13:40For instance, that's one area that is going to see some hyper growth of digital payments.
13:45Another area is on health care and insurance, any form of insurance, health insurance, car insurance, whatever.
13:51That, those two sectors, I don't know what is the adoption rate like when it comes to digital, seamless payments.
13:59There's still a lot of, say for instance for governmental billings, a thousand and one verifiers that go along the way.
14:08But I'm sure if we have the guts for it, we can just, you know, move it over to digital because what's the difference me going for, you know, digital analog signatures of 10 people when I know I can do this digitally in a much more secure fashion through biometrics and so on.
14:26If I have cleared you and your colleague as the verifier, off you go with the payments.
14:31But there seems to be some friction in these two spaces.
14:35What are your thoughts on my view on this one?
14:37I think so for ADN, we're very much serving a lot of enterprise customers who serve consumers, right?
14:43When it comes to that part that you mentioned is a bit more of a B2B kind of setup.
14:48Or G2G or G2B, something like that.
14:51In general, there is a lot of initiatives, right?
14:54There are governments who are talking about digital currencies to speed up the process.
14:58There's talk about fast payment.
15:00There's talk about Paynet working with different government linked payment schemes in the other countries to connect, you know, fast payments and instant payments kind of things.
15:12It is really positive just that I think payments is probably one of the oldest industry.
15:20I think even before there was technology, people were, you know, in the wet market.
15:25You mean like buttering?
15:26Yes, buttering.
15:27Like one bushel of apple versus one cow and something like that.
15:30So it takes a lot of effort to basically move these infrastructures, right?
15:33And it takes a lot of effort from different parties, right?
15:36From government to the businesses as well as the consumers as well.
15:39As for why I mentioned to basically move together and move up.
15:42It will come basically making payments much faster, more seamless.
15:48Maybe one day, I mean like as sometimes I run some business at the side, right?
15:54I wouldn't want to give a 30 to 60 day credit term and things like that, right?
15:58If instant payment can happen, it makes transaction much more faster.
16:02It makes operation more efficient as well.
16:04Well, this then ties up to my earlier thought.
16:07When you shared, say for instance, you're the seller and I'm the buyer,
16:09you still want to have some sort of connection with me.
16:11But on the buyer's side, with Argentic Commerce and with Unified AI or Unified Commerce,
16:21the AI will assist me in getting the best product at the cheapest price at the quickest time to deliver those products.
16:27And that might not necessarily be you, seller A, it might be seller B.
16:31And the sellers would be at a disadvantage.
16:34Because not only do they have to cut prices and increase, sorry, shorten fulfillment time.
16:41You guys are in competition with each other.
16:43So it's a race to the bottom, isn't it?
16:45Yeah, I think if, let's say if you talk about retailers, if they can't offer anything else, right?
16:51Then it's always a promotion, it's always a discount, it's always a race to the bottom, right?
16:56I think you take one step back, right?
16:58We think about what retailers need to do.
17:01Retailers will think about, okay, how do I serve my customer better?
17:05It's not just about the cheapest price, right?
17:08How do I serve them better?
17:09How do I relate my brand to them?
17:11How do I give them the best experience that they keep coming back to me?
17:15So I think those are key and core to retail.
17:18And it's, Argentine commerce or AI is probably just one of the many channels.
17:24We talk about when online shopping happen, maybe the stores will not be relevant.
17:29But fast forward 20 years, stores are still there.
17:32Stores are still so relevant.
17:34We are humans, right?
17:35I think if I wanted to buy a fish from the wet market, I need to go and smell it.
17:40I need to go and look at the ghee and all, right?
17:42It's hard for me to buy it online.
17:45If there's a food that I want to buy, I wouldn't buy it online.
17:49I think physical stores are still very relevant.
17:52The texture, whatever you think.
17:54Indeed.
17:55So each of these channels serves the customer in different way.
17:58Online is for speed and convenience and being omnipresent wherever they are.
18:02Especially on commodity products like eggs or milk or chicken.
18:05Or chicken.
18:06Yeah.
18:07But the rest, yeah.
18:08So I would say, okay, online channels serve a certain purpose.
18:14It could be just to tell you, hey, that stock is available in this store.
18:17So maybe you can go there.
18:18Or you can immediately, out of convenience, buy it and deliver.
18:21So that's one example how one channel serves them.
18:24Fast forward, last few years, social commerce came up.
18:28People are not too convinced looking at this static picture.
18:33They want influencers to show them, try it on and all.
18:36You're talking about the talk live and the like.
18:38Yeah.
18:39And now we are talking about AI being another channel for sales.
18:43But all these channels are supplementing each other.
18:46So it will not replace.
18:47But it's just more channels will start coming up.
18:50Some channels will die.
18:51Some channels continue to evolve.
18:53But they are always relevant in different ways.
18:57Because they serve different functions in the whole retail process.
19:01Now talk to me about unified commerce and the idea of it.
19:04Okay.
19:05So we talk about businesses who say, hey, I have a website.
19:09I have a mobile app.
19:10Let's say I build an agenda commerce.
19:12I have an AI agent that helps with the shopping process and all.
19:15I have a storefront.
19:17And I am actually omnichannel.
19:19I am present in many channels.
19:21But I am not necessarily unified.
19:23So buying online, you have to return it online through NinjaVent.
19:27You can't bring it into the store to exchange for something.
19:30Or maybe trying to buy something online and that stock is not available.
19:35Does the system actually check if any of the other stores has this inventory
19:40and help to deliver it or ask you to pay first and collect it in store?
19:44So that's basically cross channel experience.
19:48And some businesses can do it.
19:50They are already there, ready.
19:51Some businesses can't.
19:52Because again, in front of this, all these channels that they are operating,
19:57at the back, it's all separated.
19:59It's in silos or the systems are not talking to each other.
20:02And even if they're talking to each other, they might not be talking to each other real time.
20:07Yeah, I was about to ask.
20:09You snapped the words out of my mouth.
20:11What about real time and lack of conversation?
20:14I could return the goods to a store and say,
20:16can you process the refund immediately?
20:18They say, okay, we can't.
20:19We'll inform you in five days' time.
20:21Because they were just a collection center.
20:23They're still going back to headquarters.
20:24And they have no authority even to talk about refunds and the like.
20:27That would be dealt with another team and so on.
20:29Correct.
20:30So a lot of times we put humans behind all these processes to make it as seamless as possible.
20:35But if you have a unified system, meaning your online systems are talking to your stores,
20:40your stores are talking to the agentic AI and social commerce,
20:45they are sharing the same inventory or they even provide the same experience.
20:49When I say same experience is, if I collect points online, I should be able to use it in the store.
20:54Or vice versa.
20:56If I buy something online, I should be able to go into the store and say,
20:59hey, this product isn't good.
21:01Can I return it?
21:02I have a seven-day return policy.
21:04And can I exchange it straight away?
21:06So from the survey, businesses actually reported,
21:09consumers who were allowed to return goods in-store,
21:12actually end up spending more when they were waiting,
21:15when they were exchanging it or returning the goods in the store.
21:18So I think that's what consumers appreciates, right?
21:21Nowadays, consumers don't just want to buy the product.
21:24They want to be able to relate to the brand.
21:26They want to be able to have a good experience with the brand.
21:30That is also why some of these retailers you're seeing,
21:33they have an ice cream shop in the retail store.
21:37Decathlon, you can just play basketball and ping pong.
21:41It's experiential, right?
21:42Because they let you try the product and then you can buy it and leave with it.
21:47If you go walk into a Sephora, there are small little salons in every corner now,
21:52whereby you can try out some makeup and all.
21:54Or me as a father can sit down and my daughter tries out all the makeup.
21:58So it's quite convenient for companions.
22:00So I think in Singapore, one of the brands that we work with, Love Bonito,
22:03actually has a parent area.
22:05So the father is actually sitting down there with the kids,
22:07while the wife is trying out all the clothes.
22:10Yeah, everybody's happy.
22:12Okay, two areas before we conclude our conversation.
22:15Clearly the market is adapting it and adopting it.
22:19Clearly the providers and the sellers are all for it.
22:24The two areas I want to talk about is,
22:26number one, infrastructure readiness,
22:28and how much do you think that businesses are ready to invest in.
22:33Another area is in terms of talent,
22:36and how does talent readiness stack up against market and industry needs.
22:42Considering that this is a trend,
22:43and by the looks of it, it's an unstoppable trend right now.
22:46So where do we stand from your point of view when it comes to these two elements?
22:50Okay, so on the first part, we did ask a question during the survey,
22:54and more than 50% of the businesses say they are already investing into
22:59bringing in better experience in the store.
23:03So from my observation, international brands,
23:07they are able to scale much better because
23:09one same technology that they implement,
23:12it could be rolled out to multiple countries.
23:14So that's how Adyen have been working with a lot of the international brands.
23:18The moment you see a Uniqlo in Europe having a self-checkout chaos,
23:22then you see it in Singapore, you see it in Malaysia.
23:25It's an economy of scale, they are able to scale much faster.
23:28So you will see international brands who have much more centralized strategy
23:33to roll out this technology much faster because again cost is more optimized.
23:38They are sharing the cost among the countries.
23:40Then you see the much more locally operated brands right,
23:44whereby they would be very much leveraging on good partners to implement that.
23:50Because as a retailer, I'm good at what I do.
23:53I can sell products but I don't necessarily have 20 IT people behind me
23:58advising me what kind of solution and system to implement.
24:02It's a bit more heavily reliant on my point of sales partner,
24:06reliant on my e-commerce partner or even reliant on payment partners
24:09to make sure that the systems get unified.
24:12So it's an ongoing topic.
24:14I was at the e-commerce and retail summit last week and what I hear from a lot of leaders
24:21on the retail side is they are looking into it.
24:23But again, it is an industry that has been around for a while.
24:28Changes, I think one of the CDO actually quoted that it's not a digital transformation project.
24:35It's actually a business transformation project.
24:38Everything we change on the system impacts our people, impacts our operation, impacts every part of the business.
24:45Cost structure, price points.
24:47So I think the advice is not to look at it as an IT project anymore.
24:51It's more like a business transformation.
24:53How do you want to serve your customer in the future?
24:56Or how do you want to serve your customer in the next five years?
24:59That initiative has to start now and it can start in very small ways whereby different parts of the system gets changed.
25:07Retraining and repurposing of your frontline staff is important.
25:11I think a lot of the store staff who join enjoy serving customer rather than learning how to manage a point of sale system
25:21or learning how to troubleshoot the payment terminal and all.
25:24Their forte is basically serving the customer, understanding the product, advising them.
25:28So I think they will appreciate it the moment, you know, technology comes into play whereby it helps to streamline operations.
25:36It helps to serve customer better by, you know, I think real-time data is something that we see going to happen much more in future.
25:44You can see there's a lot of digital initiative to implement e-invoice the last couple of years.
25:51So you will also start seeing a lot of retailers moving their solution from being on-prem to being more cloud-based.
25:58Yes.
25:59And when it's cloud-based, real-time data flow is much more possible.
26:03And the talent element?
26:05On the talent side, I think, yeah, I would say on AI is still very new, right?
26:11We do need to invest into more people with AI expertise, right?
26:15And I think regardless what kind of resources we have or we don't have now on the retail sector or on the payment sector,
26:23what's important is to have people who are passionate about it.
26:27They understand how they want to serve the customer.
26:29Because at the end of the day, technology, whether it's AI or just, you know, operational efficient systems and all,
26:37is here to serve a purpose.
26:40And it cannot be an IT-driven project whereby, hell, we're going to do this, this, this and this,
26:45but actually consumers and also the staff didn't ask for it or didn't say that this is a problem statement.
26:51So again, we need resources who are well-familiar with what retail is doing and where retail is going,
26:58who understand what consumer needs are and how that need is evolving through multiple channels, through unified commerce.
27:05Then they have a case of understanding, okay, what kind of solution I need to put in place in order to serve my customer better.
27:12Thank you very much.
27:13That was Lee Sun Yen, the ADEAN Malaysia Country Manager.
27:16If you want to learn more, just head on to Estrawani and find out more there.
27:19Until then, thanks very much for watching.
27:21Catch you in the next one.
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