AI in Southeast Asia: 'Algorithm hallucinations' and ethical risks as e-commerce firms adopt new technologies

JAKARTA: Rosy pink, warm brown and coral — these are the latest lipstick hues Mdm Sita Kurniawan has bought online in the past few months. 

Normally, before making a purchase, the 40-year-old human resources practitioner would do extensive research, reading internet reviews, studying beauty influencers and canvassing friends’ opinions. 

But for this recent spate of retail therapy she found a new faster tactic: try before you buy, virtually. 

After testing out the lipsticks several times through an AI shade finder, she bought them on an e-commerce platform. The machine-learning technology uses facial recognition software to recollect and learn how different shades suit various features and complexions. 

The mother of two, who lives in Bekasi on the outskirts of Jakarta,  has shopped online since 2018 but became an avid e-commerce customer during the COVID-19 pandemic, like many people living in Southeast Asia’s cities, drawn online by the convenience and the discounts.

According to data gathering website Statista, the region’s internet economy is predicted to reach US$363 billion by 2025. 

And as it grows, AI technologies are stepping in to make the shopping experience more seamless, changing people’s retail behaviour and potentially altering the region’s urban planning in the long term, analysts told CNA.

However, they warn, like most technologies, the use of AI in e-commerce is a double-edged sword. And in Southeast Asia, where e-commerce is one of the region’s fastest growing sectors, according to regional industry magazine Retail Asia, the stab could be especially sharp. 

AI is not a newcomer to e-commerce. Many companies have been using the technology for years, possibly about a decade, said Mr Simon Wintels,