Artificial intelligence is rapidly reshaping Philippine retail, but technology alone will not determine which businesses succeed, according to venture capital firm Kickstart Ventures, which says disciplined execution and sound business fundamentals remain the strongest drivers of sustainable growth.
Speaking at the 32nd National Retail Conference and Expo 2026, Joan Yao, general partner at Kickstart Ventures, said AI is changing how retailers engage customers, manage operations, and develop products as consumer expectations continue to evolve.
The stakes are rising. The Philippine retail market is projected to reach USD64.99 billion by 2031, prompting businesses to accelerate investments in AI and digital tools to improve customer experience, streamline operations, and sharpen their competitive edge.
“Technology evolves, trends come and go, but the fundamentals tend to stay the same,” Yao said.
She noted that AI adoption among Filipino merchants continues to increase, while most online shoppers already use AI-powered features at least once a week. Yet businesses that rely on technology without strengthening their core operations may struggle to sustain growth or attract investors.
Instead, Yao said resilient retailers share four defining traits: community-driven growth, channel fluency, operational leverage, and disciplined cash flow management.
She cited Edamama, the online retailer for baby and maternity products, as an example of a company that leveraged its parent community to shape its private-label offerings.
“The channels may change, but the core message of what the brand stands for has stayed the same, and this really resonates with people,” she said.
Yao also highlighted the growing importance of omnichannel retailing as consumers increasingly shift between online platforms and physical stores before making purchases. While smartphones accounted for most Philippine e-commerce transactions in 2025, many shoppers still preferred visiting brick-and-mortar outlets before completing purchases online.
As AI becomes more deeply embedded in retail, Yao said the industry’s competitive advantage will increasingly depend on how effectively businesses integrate technology with operational excellence. For retailers, the challenge is no longer whether to adopt AI, but how to use it to strengthen customer relationships, improve efficiency, and generate profitable growth rather than simply keeping pace with digital trends.
