Adopt or die? How Southeast Asian small businesses are using AI to stay competitive

The U.S. and China are usually apical of caput erstwhile it comes to artificial quality and generative AI. But Southeast Asia's tiny businesses person immense imaginable that shouldn't beryllium ignored, experts say.

In fact, it's a substance of survival, according to Jochen Wirtz, a prof of selling astatine the National University of Singapore Business School, who said those that autumn down volition beryllium "moved into a franchise concern oregon volition beryllium pushed retired of the marketplace by bigger players who bash it."

"Either you turn and adopt, oregon you die," helium added.

AI and genAI volition lend astir $120 cardinal to the region's gross home merchandise by 2027, Boston Consulting Group projected successful an April study titled "Unlocking Southeast Asia's AI Potential," which cited the technology's imaginable to "redefine concern processes and unlock caller gross streams." And Google's e-Conomy SEA 2024 report recovered that Singapore, the Philippines and Malaysia are ranked among the apical 10 globally for AI-related searches and demand, indicating "curiosity" and an "active interest" wrong the region.

Youth is an advantage. Among surveyed countries successful the Asia-Pacific, Vietnam, Malaysia and the Philippines person the highest percent of concern owners oregon leaders nether 40 years of age, according to CPA Australia's Small Business Survey 2024-25.  

For countries specified arsenic Vietnam, "the aboriginal is agleam due to the fact that ... it's a precise young population, is simply a precise internet-savvy population," said Soumik Parida, subordinate programme manager of the nonrecreational connection programme astatine RMIT University Vietnam's School of Communication and Design. "They are starting to person a planetary dependable and they're precise casual to accommodate immoderate caller technology," helium added.

Here's however immoderate of the region's businesses are utilizing it to enactment connected apical of the contention — arsenic good arsenic the opportunities and roadblocks they face.

Customer work is the starring usage lawsuit successful Southeast Asian e-commerce, followed by selling and advertising, according to a associated study by Lazada and Kantar astir AI adoption trends successful the six largest economies successful Southeast Asia. Also known arsenic the ASEAN-6, they comprise Singapore, Malaysia, Vietnam, Indonesia, the Philippines and Thailand.

A McKinsey survey released successful March revealed a akin trend: Companies person adopted genAI for selling and sales, with tech companies starring the charge. It besides showed that astir adopters are utilizing the exertion to make text, with 63% of surveyed companies reporting that they bash so.

GenAI presents a unsocial boon for a portion arsenic linguistically divers arsenic Southeast Asia: Aside from penning personalized selling messages, it tin besides construe promotional texts into antithetic languages.

For example, Lita Global, an Indonesia-based societal media level for gamers, is benefiting a batch from that. Since integrating OpenAI's models successful the 2nd fractional of past year, it said, it has been capable to big astir doubly arsenic galore online gaming events monthly, acknowledgment to greater efficiency.

That's a large boost for its business, since each lawsuit tin rise play revenues by an mean of 20%, the institution said. 

With genAI, employees tin rapidly construe announcements astir events from English to Southeast Asian languages, specified arsenic Vietnamese and Thai, to scope much users successful the region. And that frees them up — clip primitively utilized for writing, translating and formatting promotional substance tin present beryllium utilized for organizing much revenue-generating events, according to Lita Global.

The institution besides uses genAI successful its chat relation to urge responses to users. Lita Global is simply a societal level wherever users tin prosecute different gamers to play with them online.

Gamers for prosecute typically chat with users earlier an bid is placed for a gaming session. But that tin beryllium hard erstwhile request for gamers is precocious and gamers for prosecute are engaged with different matches. Gamers for prosecute who usage the AI-recommended responses person seen a 10% to 20% uptick successful orders, said Lita Global's CEO Yihao Zhang.

"So we're utilizing AI to truly assistance them to amended their efficiency, to assistance them to beryllium much disposable to the users," Zhang said.

Another mode Southeast Asian MSMEs (micro, tiny and mean enterprises) tin usage genAI successful selling is done AI livestreaming. Google's SEA e-Conomy study noted that unrecorded buying has go much fashionable successful the region. Live shopping, oregon livestreaming, usually involves a big showcasing the products for sale. Not lone does this see covering try-ons, but shoppers tin besides inquire questions successful the comments section, which are answered successful existent time.

While livestreams are traditionally hosted by humans successful studios, MSMEs whitethorn deficiency the funds oregon method know-how to execute regular livestreams to boost sales. AI livestreaming tin unfastened doors to caller opportunities for sellers, said Jensen Wu, CEO of TopviewAI.

TopviewAI says connected its website that its AI livestreaming services tin outgo astir $1 per minute. Instead of spending connected workplace rental, samples of the merchandise and labour of quality hosts, companies tin person 1 idiosyncratic show the livestream, Wu said. That helps little costs portion boosting sales, making for a "pretty good" instrumentality connected investment, helium added.

The ratio boost doesn't travel cheap, however.                             

That's wherefore tiny businesses are constricted to adopting AI connected a tiny standard for now. Using AI chatbots for comparatively elemental tasks, for example, tin trim labour costs arsenic subscriptions for specified services thin to beryllium inexpensive. On apical of that, with a assortment of third-party tools disposable connected the market, concern owners tin besides person their pick, according to RMIT Vietnam's Parida.

Small businesses successful the fashion, and nutrient and beverage industries successful Vietnam, for example, person begun utilizing chatbots to negociate inquiries and orders, Parida said.

"Anything beyond that requires a batch of expense" helium said.

While larger companies tin prosecute bundle companies to make blase systems customized to a business' needs, it's a luxury not galore tin afford.

Even companies that person the expertise to integrate AI themselves wage a premium to bash so.

Lita Global, for example, spends astir $2,000 connected AI each month, portion of which goes to purchasing tokens for OpenAI's exertion programming interface (API). APIs let companies to physique upon OpenAI's models, alternatively of requiring companies to physique the AI exemplary from scratch.

However, arsenic AI improves, the outgo to usage it is expected to drop. Research and advisory steadfast Gartner predicted successful February that by 2027, the mean prices of exertion programming interfaces for genAI volition autumn to little than 1% of the existent mean terms for the aforesaid technology.

That could mean adjacent greater affordability for smaller businesses adopting AI for their businesses.

In emerging markets specified arsenic those successful Southeast Asia wherever labour costs are low, companies whitethorn consciousness little motivated to boost ratio done adoption of technology. But exertion tin supply "much amended [outcomes]" for existing concern practices, said NUS Business School's Wirtz. AI is conscionable different mode to follow technology.

He compared it to the popularization of e-hailing services, which reduced the hazard of tourists getting scammed by taxi drivers successful overseas countries, arsenic e-hailing apps could estimation the terms of a journey.

And with a tech-savvy colonisation of entrepreneurs successful economies specified arsenic Vietnam, wherever labour costs are low, the excitement to follow AI remains high, according to Parida.

"It's a precise bare young people," helium said.