Professor Bo An from Nanyang Technological University discussed the impact of AI on e-commerce in a recent interview. He highlighted that the use of AI has led to a decline in foot traffic and sales volumes in traditional brick-and-mortar shops. To avoid bankruptcy, many physical stores are now combining online and offline sales strategies, which can be more efficient. This shift in business frameworks could also have implications for urban layouts in the region, with e-commerce companies potentially establishing distribution centers on the city’s edge to reduce costs. Additionally, the reduced office space requirements for e-commerce compared to traditional commerce could also influence urban planning.
Professor Bo pointed out that Singapore’s unique features, such as its developed transportation system, allow for a balance between e-commerce and physical commerce. Consumers in Singapore can easily purchase products from brick-and-mortar shops within a short period, whereas online shopping may involve more steps and time before receiving the products. Despite the widespread use of AI in e-commerce and the presence of online shopping platforms like Shopee and Lazada, brick-and-mortar shops continue to play an important role in the commerce framework of Singapore due to limited space for large storage centers for e-commerce companies.
Elisa Sutanudjaja, an urban planner based in Jakarta, discussed the challenges faced by premium malls in Southeast Asia in attracting visitors amidst the rise of e-commerce. To keep people coming to shopping centers, these malls have adapted by holding events such as meet-and-greets with pop stars. While premium malls may not be significantly impacted by e-commerce and AI, the rise of online shopping has brought a new urban planning challenge to Southeast Asian megacities and suburbs, in the form of the need for many warehouses. The demand for warehouses has increased by 90% in recent years with the growth of e-commerce companies, and AI is expected to continue fueling this trend.
Elisa emphasized that the demand for warehouses in cities or industrial planning is growing, but the availability of suitable spaces is not balanced. This imbalance could pose challenges in effectively meeting the increasing demand for warehouses in urban areas as e-commerce continues to expand. As AI continues to drive the e-commerce boom, the trend of requiring more warehouses is likely to persist in the coming years. The need for strategic urban planning to address this demand and ensure the efficient use of available space in cities and industrial areas becomes increasingly important.
