- BCG forecasted that AI along with generative AI will add approximately $120 billion to the area's GDP by 2027.
- The top application of customer service in Southeast Asia's e-commerce sector leads, with marketing and advertising coming second, as stated in a collaborative study by Lazada and Kantar.
- Although AI provides a significant productivity enhancement for small enterprises, it does entail considerable costs.
When discussing artificial intelligence and generative AI, the focus often lands on the U.S. and China. However, according to experts, we should not overlook the significant untapped potential of small enterprises in Southeast Asia.
Indeed, this is crucial for survival, as stated by Jochen Wirtz, a marketing professor at the National University of Singapore Business School. He mentioned that companies lagging behind risk being "converted into franchises" or forced out of the market by larger competitors who excel in these areas.
He remarked, ' Either you evolve and adapt, or you perish.'
Artificial Intelligence and generative AI are expected to add approximately $120 billion to the area's Gross Domestic Product by 2027, according to a report released in April by the Boston Consulting Group entitled Revealing the AI Opportunities in Southeast Asia, which highlighted the technology's ability to "transform business processes and open up new avenues for revenue." Google's E-Commerce Southeast Asia 2024 Report discovered that Singapore, the Philippines, and Malaysia are positioned within the top 10 worldwide for AI-related inquiries and demand, suggesting a notable "curiosity" and "engaged interest" in the area.
Being young is beneficial. The survey conducted across various countries in the Asia-Pacific region shows that Vietnam, Malaysia, and the Philippines lead with the largest proportion of business proprietors or executives below 40 years old, as reported. CPA Australia's Survey on Small Businesses for 2024-25 .
For nations like Vietnam, “the future looks promising due to its youthful demographic and tech-savvy populace,” stated Soumik Parida, who serves as an associate program manager for the professional communication program at RMIT University Vietnam’s School of Communication and Design. He further noted, “This generation is beginning to assert itself globally and readily embraces new technologies.”
This shows how several companies in the area are utilizing these strategies to maintain their competitive edge—along with the challenges and obstacles they encounter.
Most popular use cases
Customer service stands as the foremost application area for e-commerce in Southeast Asia, with marketing and advertising coming second, as reported. A collaborative report by Lazada and Kantar Regarding the uptake of artificial intelligence within the six biggest economic powers in Southeast Asia. These nations, referred to as the ASEAN-6, include Singapore, Malaysia, Vietnam, Indonesia, the Philippines, and Thailand.
A McKinsey survey The release in March highlighted a comparable pattern: Businesses have embraced generative artificial intelligence (genAI) primarily for marketing and sales purposes, with tech firms at the forefront. The data further indicated that the majority of these businesses are utilizing this technology to produce text content, as evidenced by 63% of the participating organizations stating their use for such tasks.
GenAI offers a distinctive advantage for a multilingual area like Southeast Asia: Besides crafting customized marketing communications, it can also convert promotional content into various languages.
For instance, Lita Global, an Indonesian social media platform tailored for gamers, is experiencing significant growth due to this trend. After incorporating OpenAI’s models during the latter part of last year, they have managed to nearly double their monthly online gaming event hosting capacity, all attributed to improved efficiency.
This represents significant growth for their business operations, as each event has the potential to increase weekly revenue by approximately 20% on average, according to the firm.
Using generative AI, staff members can swiftly convert event announcements from English into Southeast Asian languages like Vietnamese and Thai, thereby expanding their user base within the area. This allows them to dedicate more time—formerly spent on crafting, translating, and arranging promotional content—to planning additional profit-boosting events, as stated by Lita Global.
The firm similarly employs genAI within its chat feature to suggest replies to customers. Lita Global serves as a community hub where individuals can employ fellow gamers for online gaming sessions.
Hired gamers usually engage in conversation with clients prior to placing an order for a gaming session. However, this becomes challenging when there’s a surge in demand and these hired gamers are occupied with ongoing games. According to Yihao Zhang, the CEO of Lita Global, those who utilize AI-suggested replies have experienced a boost in orders ranging from 10% to 20%.
"Thus, we're leveraging AI to boost their efficiency and make them more accessible to users," Zhang stated.
A different approach for micro, small, and medium-sized enterprises (MSMEs) in Southeast Asia to leverage generative artificial intelligence (genAI) in their marketing strategies is via AI-powered livestreaming. According to Google’s SEA e-Conomy report, live shopping has gained significant traction within the area. Live shopping typically entails a presenter demonstrating the items available for purchase. This can encompass activities like trying on clothes; moreover, viewers have the opportunity to pose inquiries in the chat box, with responses provided instantly during the broadcast.
Although traditional livestreams are typically conducted by individuals in studio settings, Micro, Small, and Medium-sized Enterprises (MSMEs) might not have the resources or expertise to carry out consistent livestreams aimed at increasing their sales. According to Jensen Wu, CEO of TopviewAI, AI-powered livestreaming could provide fresh possibilities for vendors.
According to TopviewAI’s website, their AI-powered live streaming service charges approximately $1 per minute. Rather than investing in studio rentals, product samples, and hiring human presenters, businesses can employ just one individual to oversee the stream, as mentioned by Wu. This approach reduces expenses and increases sales, resulting in a substantial return on investment, he noted.
The problem of costs
The increase in efficiency does come at a cost, though.
This is why smaller enterprises currently restrict themselves to implementing AI on a modest level. For instance, they might use AI chatbots for basic duties, which helps cut down on staffing expenses since these services usually come at a low cost. Additionally, thanks to the wide array of third-party solutions accessible in the marketplace, entrepreneurs can choose from various options, notes Parida from RMIT Vietnam.
For instance, small enterprises in sectors like fashion and food and drink within Vietnam have started employing chatbots to handle queries and orders, according to Parida.
He mentioned that anything beyond that involves significant costs.
Although big businesses have the option to employ software firms for tailored advanced systems designed around their specific requirements, this privilege remains out of reach for most smaller entities.
Despite having their own capabilities to incorporate artificial intelligence, these businesses still end up paying extra for this integration.
For instance, Lita Global allocates approximately $2,000 monthly towards artificial intelligence expenses, with some of this budget used to buy tokens for OpenAI’s Application Programming Interface (API). These APIs enable firms to expand on OpenAI's pre-existing models rather than necessitating these businesses to develop their own AI systems entirely from the ground up.
As artificial intelligence advances, the expense associated with using it should decrease. The research and consulting company Gartner forecasted in February that by 2027, the typical costs of application programming interfaces for generative AI will plummet to below one percent of their present average pricing levels.
This might result in increased cost-effectiveness for small enterprises integrating AI into their operations.
Outlook for the region
In growing economies like those found in Southeast Asia, where labor expenses are minimal, businesses might not be driven to enhance productivity via technological integration. However, according to NUS Business School’s Wirtz, tech solutions have the potential to significantly improve current operational methods. Adopting artificial intelligence represents merely one approach within this broader category of leveraging technology.
He drew a parallel between this situation and the rise of ride-hailing applications, noting how these have minimized the chance of travelers being deceived by cab drivers abroad since such apps can calculate trip costs beforehand.
Given the technologically inclined populace of business owners in countries like Vietnam—where production expenses are minimal—the enthusiasm for embracing artificial intelligence stays robust, as stated by Parida.
He mentioned, 'It’s a generation of very hungry young individuals.'