Bo Ang, a professor of computer science and engineering at Nanyang Technological University in Singapore and co-director of the Artificial Intelligence Institute, said the use of AI is The decline of e-commerce is impacting traditional physical commerce in a number of ways, including reduced foot traffic and sales at brick-and-mortar stores.
“As a result, to avoid the risk of bankruptcy, many brick-and-mortar stores have tried to reframe their business by merging stores together.“Online and offline sales strategies can become more efficient,” he said.
This could have implications for urban planning in the area.
Prof Bo opined that e-commerce companies could set up distribution centres on the edge of cities, especially in city-states. Like Singapore.
“This will significantly reduce the costs, which can be prohibitive, of locating a distribution centre within a central business district (CBD) area.”
“Secondly, compared with traditional brick-and-mortar commerce, the office space required for e-commerce can be significantly reduced because many operations such as advertising, consultation and after-sales service can be done online,” he pointed out.
He believes Singapore is unique compared to other countries and regions in that e-commerce and brick-and-mortar commerce coexist and balance well.
“As a highly developed country, its improved transportation system allows consumers to purchase their desired products at physical stores within a short period of time, usually within a few hours.”
“In contrast, although online shopping is convenient, it requires several steps before consumers can receive their goods – ordering, payment, order confirmation and product delivery – which is usually the most time-consuming part of the online shopping process,” he said.
He also noted that Singapore is a small country, meaning modern e-commerce companies have limited space to set up large storage centres.
“Given these facts, despite AI being widely used in e-commerce and the existence of a number of online shopping platforms such as Shopee and Lazada, physical stores still remain a vital part of the overall commercial framework in Singapore,” Prof Bo posited.
But other markets face different challenges.
Jakarta-based urban planner Elisa Sutanujaja said high-end malls in Southeast Asia have responded quickly to keep people coming to shopping centres, including by hosting events on-site to attract visitors.
This could include events such as meet-and-greets with pop stars, she said.
These types of malls are less affected by the rise of e-commerce and AI.
But she noted that e-commerce has brought new urban planning challenges, such as the need for more warehouses in Southeast Asia's big cities and suburbs.
Some cities may not be ready for this.
She believes the rise of e-commerce companies may have led to a 90 percent increase in demand for warehouses in recent years.
AI is likely to fuel the boom in e-commerce, so the rise of warehouses is likely to remain a trend for years to come.
“But warehouses make up a small proportion of urban and industrial planning, which is why there is an imbalance between supply and demand,” said Elisa, executive director of the Rujak Center for Urban Studies, a think tank.
