Southeast Asian small companies utilizing AI to remain aggressive

The U.S. and China are often prime of thoughts on the subject of synthetic intelligence and generative AI. However Southeast Asia’s small companies have large potential that should not be ignored, consultants say.

In reality, it is a matter of survival, based on Jochen Wirtz, a professor of selling on the Nationwide College of Singapore Enterprise College, who mentioned people who fall behind will likely be “moved right into a franchise enterprise or will likely be pushed out of the market by greater gamers who do it.”

“Both you develop and undertake, otherwise you die,” he added.

AI and genAI will contribute about $120 billion to the area’s gross home product by 2027, Boston Consulting Group projected in an April report titled “Unlocking Southeast Asia’s AI Potential,” which cited the know-how’s potential to “redefine enterprise processes and unlock new income streams.” And Google’s e-Conomy SEA 2024 report discovered that Singapore, the Philippines and Malaysia are ranked among the many prime 10 globally for AI-related searches and demand, indicating “curiosity” and an “lively curiosity” throughout the area.

Youth is a bonus. Amongst surveyed nations within the Asia-Pacific, Vietnam, Malaysia and the Philippines have the very best share of enterprise house owners or leaders below 40 years of age, based on CPA Australia’s Small Business Survey 2024-25.  

For nations equivalent to Vietnam, “the longer term is vibrant as a result of … it is a very younger inhabitants, is a really internet-savvy inhabitants,” mentioned Soumik Parida, affiliate program supervisor of the skilled communication program at RMIT College Vietnam’s College of Communication and Design. “They’re beginning to have a worldwide voice they usually’re very straightforward to adapt any new know-how,” he added.

This is how among the area’s companies are utilizing it to remain on prime of the competitors — in addition to the alternatives and roadblocks they face.

Customer support is the main use case in Southeast Asian e-commerce, adopted by advertising and promoting, based on a joint report by Lazada and Kantar about AI adoption developments within the six largest economies in Southeast Asia. Often known as the ASEAN-6, they comprise Singapore, Malaysia, Vietnam, Indonesia, the Philippines and Thailand.

A McKinsey survey launched in March revealed an analogous pattern: Firms have adopted genAI for advertising and gross sales, with tech corporations main the cost. It additionally confirmed that the majority adopters are utilizing the know-how to generate textual content, with 63% of surveyed corporations reporting that they achieve this.

GenAI presents a singular boon for a area as linguistically numerous as Southeast Asia: Apart from writing customized advertising messages, it could actually additionally translate promotional texts into completely different languages.

For instance, Lita World, an Indonesia-based social media platform for avid gamers, is benefiting quite a bit from that. Since integrating OpenAI’s fashions within the second half of final yr, it mentioned, it has been in a position to host nearly twice as many on-line gaming occasions month-to-month, because of larger effectivity.

That is an enormous enhance for its enterprise, since each occasion can increase weekly revenues by a median of 20%, the corporate mentioned. 

With genAI, workers can rapidly translate bulletins about occasions from English to Southeast Asian languages, equivalent to Vietnamese and Thai, to achieve extra customers within the area. And that frees them up — time initially used for writing, translating and formatting promotional textual content can now be used for organizing extra revenue-generating occasions, based on Lita World.

The corporate additionally makes use of genAI in its chat perform to advocate responses to customers. Lita World is a social platform the place customers can rent different avid gamers to play with them on-line.

Avid gamers for rent sometimes chat with customers earlier than an order is positioned for a gaming session. However that may be tough when demand for avid gamers is excessive and avid gamers for rent are busy with different matches. Avid gamers for rent who use the AI-recommended responses have seen a ten% to twenty% uptick in orders, mentioned Lita World’s CEO Yihao Zhang.

“So we’re utilizing AI to essentially assist them to enhance their effectivity, to assist them to be extra out there to the customers,” Zhang mentioned.

One other means Southeast Asian MSMEs (micro, small and medium enterprises) can use genAI in advertising is thru AI livestreaming. Google’s SEA e-Conomy report famous that stay procuring has turn into extra in style within the area. Dwell procuring, or livestreaming, often entails a bunch showcasing the merchandise on the market. Not solely does this embrace clothes try-ons, however consumers may ask questions within the feedback part, that are answered in actual time.

Whereas livestreams are historically hosted by people in studios, MSMEs might lack the funds or technical know-how to execute common livestreams to spice up gross sales. AI livestreaming can open doorways to new alternatives for sellers, mentioned Jensen Wu, CEO of TopviewAI.

TopviewAI says on its web site that its AI livestreaming providers can price round $1 per minute. As an alternative of spending on studio rental, samples of the merchandise and labor of human hosts, corporations can have one individual monitor the livestream, Wu mentioned. That helps decrease prices whereas boosting gross sales, making for a “fairly good” return on funding, he added.

The effectivity enhance does not come low cost, nevertheless.                             

That is why small companies are restricted to adopting AI on a small scale for now. Utilizing AI chatbots for comparatively easy duties, for instance, can scale back labor prices as subscriptions for such providers are usually cheap. On prime of that, with quite a lot of third-party instruments out there in the marketplace, enterprise house owners may have their decide, based on RMIT Vietnam’s Parida.

Small companies within the style, and meals and beverage industries in Vietnam, for instance, have begun utilizing chatbots to handle inquiries and orders, Parida mentioned.

“Something past that requires a whole lot of expense” he mentioned.

Whereas bigger corporations can rent software program corporations to develop subtle programs custom-made to a enterprise’ wants, it is a luxurious not many can afford.

Even corporations which have the experience to combine AI themselves pay a premium to take action.

Lita World, for instance, spends about $2,000 on AI each month, a part of which works to buying tokens for OpenAI’s utility programming interface (API). APIs enable corporations to construct upon OpenAI’s fashions, as a substitute of requiring corporations to construct the AI mannequin from scratch.

Nevertheless, as AI improves, the associated fee to make use of it’s anticipated to drop. Analysis and advisory agency Gartner predicted in February that by 2027, the common costs of utility programming interfaces for genAI will fall to lower than 1% of the present common value for a similar know-how.

That would imply even larger affordability for smaller companies adopting AI for his or her companies.

In rising markets equivalent to these in Southeast Asia the place labor prices are low, corporations might really feel much less motivated to spice up effectivity by way of adoption of know-how. However know-how can present “significantly better [outcomes]” for present enterprise practices, mentioned NUS Enterprise College’s Wirtz. AI is simply one other method to undertake know-how.

He in contrast it to the popularization of e-hailing providers, which lowered the chance of vacationers getting scammed by taxi drivers in international nations, as e-hailing apps may estimate the worth of a journey.

And with a tech-savvy inhabitants of entrepreneurs in economies equivalent to Vietnam, the place labor prices are low, the thrill to undertake AI stays excessive, based on Parida.

“It is a very hungry younger folks,” he mentioned.