The use of AI in e-commerce has had a significant impact on traditional brick-and-mortar shops, leading to a decline in foot traffic and sales volumes. To adapt to this changing landscape, many physical shops have started combining online and offline sales strategies to remain competitive and efficient. This shift could also influence urban layouts in the region, with e-commerce companies potentially establishing distribution centers on the city’s edge to reduce costs associated with setting up these facilities in the central business district. Additionally, the reduced need for office space in e-commerce compared to traditional commerce could further shape the urban environment.
In countries like Singapore, where there is a balance between e-commerce and physical commerce, the unique features of the city-state enable consumers to easily access products from brick-and-mortar shops within a short period. Despite the convenience of online shopping, the process involved in placing an order and receiving a product can be time-consuming, which may still make physical stores attractive to consumers. However, the limited space in a small country like Singapore poses challenges for modern e-commerce companies looking to set up large storage centers, making brick-and-mortar shops an integral part of the overall commerce framework.
In contrast, other markets face different challenges when it comes to integrating e-commerce and traditional commerce. Mdm Elisa Sutanudjaja, an urban planner based in Jakarta, noted that premium malls in Southeast Asia have adapted by organizing events to attract visitors and maintain footfall. While these malls may not be as impacted by the rise of e-commerce and AI, the increasing demand for warehouses in megacities and suburbs poses a new urban planning challenge. With the rise of e-commerce companies, the demand for warehouses has increased significantly, leading to an imbalance of supply and demand in terms of available warehouse space in cities or industrial areas.
Looking ahead, AI is expected to continue fueling the e-commerce boom, further increasing the need for warehouses in urban areas. This trend is likely to persist in the coming years as e-commerce companies rely on AI technologies to optimize their operations and enhance customer experience. However, the challenge lies in finding a balance between the demand for warehouses and the available space in cities or industrial zones. As the e-commerce landscape continues to evolve, urban planners and policymakers will need to address these issues to ensure sustainable growth and development in the region.
