Contents 06Chapter 3:Meeting ConsumerDemands for Transparency and Action20 01Foreword 07Chapter 4:Hong Kong’s ChangingRetail Landscape26 02About the study 4 08Chapter 5:Reinventing Hong Kong’sShopping Experience31 03Executive Summary5 09Key Considerations on AI Journey34 05Chapter 2:Overcoming Barriers to AIAdoption in Retail13 10The Future is Agent-Centric43 Foreword In the dynamic landscape of retail, artificial intelligence (AI) is emerging as atransformative force, revolutionising how businesses operate and interact with theircustomers. From chatbots that offer personalised recommendations to advancedinventory management systems that optimise stock levels, AI is enabling retailers toenhance efficiency and deliver tailored experiences. These innovations are not merelyincremental improvements; they are redefining the very fabric of the retailecosystem, influencing supply chain management, customer segmentation, andmarketing strategies. In our consumer survey, we found that the regional differences in AI adoptionbetween Hong Kong and the GBA consumers are particularly noteworthy. While GBAconsumers exhibit higher confidence in AI tools and are more exposed to AI-drivenshopping experiences, Hong Kong consumers tend to be more reserved, underscoringthe importance of tailoring AI strategies to local consumer behaviours andpreferences. As AI continues to disrupt the retail industry, it is not merely a tool for efficiency buta catalyst for transformation. Retailers must adopt a strategic AI roadmap to navigatethe complexities of scaling AI effectively, addressing challenges, and unlocking newgrowth opportunities. AI transformation, like digital transformation before it, is aboutgetting prepared for a future that will include it – being able to integrate with systemsand applications that will leverage it. Examining the role of AI in retail reveals that its impact extends well beyondoperational efficiencies. AI empowers consumers to make informed decisions, findbetter deals, and align their purchases with personal values. This shift placesunprecedented pressure on retailers to deliver seamless, personalised interactionsacross both digital and physical platforms, creating a high-stakes environment wherecustomer loyalty can be won or lost in moments. This report provides a comprehensive analysis of the trends and patterns shaping theretail sector in Hong Kong and the GBA, offering actionable insights to help retailersadapt, innovate, and thrive in an increasingly AI-driven world. The journey towards aseamless, hyper-personalised retail ecosystem is not automatic, it requires vision,strategy, and collaboration. Are you ready to lead the way? To gain deeper insights into how AI is being leveraged in the retail sector, weconducted interviews with leading retailers in Hong Kong SAR (Hong Kong). Theseinterviews provide a firsthand account of how retailers are currently utilising AI, thechallenges they encounter, and their strategic plans for the future. AnnaLinChief ExecutiveGS1 Hong Kong AliceYipHead of Consumer & Retail HKKPMG China Aboutthestudy YouGov conducted a comprehensive survey on attitudes and preferences towardsemerging retail and retail technology trends, with a particular focus on the integrationof AI in the retail sector. The survey was carried out across Hong Kong and the GBA**, capturing responsesfrom a diverse range of participants across all age groups, income levels, anddemographics. Conducted in August 2025, the study polled over 1,500 participants andaims to provide insights into how consumers perceive and interact with AI-driven retailinnovations, as well as how these technologies are reshaping the industry landscape. To ensure the sample was representative of the broader population, weighting wasapplied to basic demographics, including marital status, employment status, andincome levels. This approach enabled a balanced representation of the target markets,allowing meaningful comparisons and generalisations. The data presented in the reportreflects rounded percentages to the nearest whole number, ensuring clarity and easeof interpretation. In addition to the consumer survey, the research team interviewed senior C-suite-levelexecutives from leading retailers, and AI innovators. These interviews, conducted inperson or via video calls, provided valuable insights into the challenges andopportunities posed by AI in retail. Their input, combined with the consumer surveyresults, offers a holistic view of the current state and future trajectory of AI in retailacross Hong Kong and the GBA. Executivesummary Redefining Retail: The Shift from Transactional toExperiential Retail AI and the Human Touch: Balancing Functionality andEmotion The retail landscape is evolving from a transactional model to an experientialone, driven by changing consumer preferences. GBA and Hong Kongconsumers are generally satisfied with AI-powered experiential shoppingexperiences, 62% of Hong Kong consume