AI and Sustainability Transform Retail Spending in Hong Kong and GBA

As consumer spending habits evolve, the integration of artificial intelligence (AI) and sustainability is reshaping the retail landscape in Hong Kong and the Greater Bay Area (GBA). A recent survey conducted by KPMG China and GS1 Hong Kong reveals significant differences in how consumers in these regions engage with AI-driven shopping experiences.

The study, titled “Beyond Retail in the Age of AI,” surveyed over 1,500 consumers in both Hong Kong and GBA cities in August 2025. It highlights that while GBA consumers show greater confidence in AI tools, Hong Kong shoppers remain cautious, indicating a need for businesses to adapt their strategies to local preferences.

Shifting Consumer Preferences

In recent years, the retail sector has seen a shift from traditional transactional models to more immersive, experiential shopping environments. In Hong Kong, 62% of consumers express satisfaction with gamified shopping experiences, while 70% appreciate interactive product displays. These preferences contribute to a more engaging shopping journey, although the popularity of live streaming and social commerce has declined since its peak in 2024.

Brands are responding by integrating innovative elements such as cafés and dedicated experience zones into their stores. Anson Bailey, Head of Consumer & Retail at KPMG China, emphasizes the transformative potential of AI in retail, stating, “AI holds the potential to transform the retail industry by enabling personalised shopping experiences and optimising supply chains.” He urges retailers to adopt strategic AI roadmaps to fully harness this technology.

Balancing AI with Human Connection

While AI enhances efficiency in areas such as photo search and facial-recognition checkout, it struggles to meet the emotional needs of consumers. This is evident in Hong Kong, where 59% of shoppers express lower trust in AI compared to their GBA counterparts. In fact, 51% of GBA consumers report satisfaction with chatbot experiences, compared to only 39% in Hong Kong.

Building relationships through friendly and knowledgeable staff remains crucial. Alice Yip, Partner and Head of Consumer & Retail for Hong Kong SAR at KPMG China, highlights the need for retailers to address barriers like trust and privacy concerns to unlock AI’s full potential for sustainable growth.

Consumer demand for sustainability is also on the rise, with shoppers increasingly seeking transparency in product information and commitments to Environmental, Social, and Governance (ESG) initiatives. The survey shows that in 2022, 81% of GBA consumers and 69% of Hong Kong consumers sought incentives for making sustainable purchases. More recently, 42% of GBA consumers and 33% of Hong Kong shoppers indicated a willingness to pay up to 10% more for sustainable products.

Health Consciousness and Cross-Border Spending

Another significant trend influencing consumer behaviour is the growing emphasis on health and wellness. In the GBA, 42% of consumers are willing to spend more on health-focused products, while 25% of Hong Kong shoppers plan to increase their spending in this area despite being more price-conscious.

Cross-border spending is becoming more prevalent among Hong Kong consumers, driven not just by cost savings but also by the pursuit of unique experiences and convenience. Retailers must adapt to these changing priorities by enriching local shopping experiences and committing to responsible practices.

As the retail sector continues to evolve in the age of AI, businesses that fail to embrace these changes risk being left behind. The findings from this survey provide valuable insights for retailers seeking to navigate the complexities of consumer expectations in both Hong Kong and the GBA.

For further details, the full report is available at the following link: Beyond Retail in the Age of AI.

KPMG and GS1 Hong Kong continue to play essential roles in empowering businesses to adapt to these new realities, fostering a collaborative ecosystem to support digital transformation and sustainability initiatives.