SMEs to Use AI to Stay Competitive

The US and China are usually the best in mind when it comes to artificial intelligence and generation AI. However, experts say there are great possibilities that Southeast Asian small businesses should not be ignored.

In fact, it's a matter of survival, according to Jocchen Wiltz, a marketing professor at the University of Singapore Business School.

“You either grow up and become adopted or die,” he added.

AI and genai will donate approximately $120 billion to the regional gross domestic product by 2027. The Boston Consulting Group was predicted in an April report that “unlocks the possibilities of AI in Southeast Asia.” Google's e-Conomy Sea 2024 report also found that Singapore, the Philippines and Malaysia rank among the top 10 in AI-related search and demand, indicating “curiosity” and “active interest” within the region.

Young people are an advantage. According to the CPA Australia Small Business Survey 2024-25, the Asia-Pacific region's surveyed countries have the highest percentage of business owners or leaders under the age of 40 in Vietnam, Malaysia and the Philippines.

For countries such as Vietnam, “the future is bright… because it's a very young population and a very internet-savvy population,” says Soumik Parida, Associate Program Manager, Professional Communications Program at RMIT University Vietnam School of Communication and Design. “They are beginning to have a global voice and can easily adapt new technologies,” he added.

It maintains the way some of the local businesses use it to stay at the top of the competition and the opportunities and obstacles they face.

According to the joint report of Lazada and Kantal, Customer Service is the leading use case for six large economies in Southeast Asia, followed by marketing and advertising, according to the joint report of Southeast Asia and Kantal, according to the joint report of Southeast Asia and Kantal, Customer Service is the leading use case for six large economies in Southeast Asia, followed by marketing and advertising. Also known as ASEAN-6, it is composed of Singapore, Malaysia, Vietnam, Indonesia, the Philippines and Thailand.

A McKinsey survey released in March revealed a similar trend. Companies employ Genai for marketing and sales, with high-tech companies leading the fees. It also shows that most employers use technology to generate text, with 63% of companies surveyed reporting that they do so.

Genai offers unique benefits to linguistically diverse regions, such as Southeast Asia. Aside from writing personalized marketing messages, promotional text can also be converted to different languages.

For example, Lita Global, an Indonesia-based social media platform for gamers, has benefited a lot from it. Since integrating Openai's model later last year, he said that it has been able to host almost twice as many online gaming events each month thanks to its increased efficiency.

According to the company, this is a huge boost for the business as all events can earn weekly revenues at an average of 20%.

Genai allows employees to quickly translate announcements about events from English to Southeast Asian, reaching more users in the region, including Vietnamese and Thai. According to Lita Global, you can also use the time that was originally used to write, translate, manipulate, translate and format promotional texts.

The company also recommends using Genai in its chat feature to respond to users. Lita Global is a social platform that allows users to hire other gamers to play online.

Employed gamers usually chat with users before an order is placed for a gaming session. However, when gamers are in high demand and rental gamers are busy with other games, that can be difficult. Employer gamers using AI-Recommended answers have seen an increase in orders from 10% to 20%, said Lita Global CEO Yihao Zhang.

“So we use AI to really help them improve efficiency so that users can make their users more accessible,” Zhang said.

Another way that MSMEs (micro, small and medium-sized businesses) in Southeast Asia can use Genai in marketing is by using AI live streaming. Google's Sea E-Conomy Report says live shopping is more popular in the area. Live shopping, or live streaming, usually involves hosts who showcase products for sale. Not only does this include clothing trials, but shoppers can also ask questions in the comments section. The comments section will be answered in real time.

Livestreams are traditionally hosted by humans in studios, but MSMEs may lack the funding or technical know-how to run the regular livestream to promote sales. According to TopViewi CEO Jensen Wu, AI LiveStreaming can open the door to new opportunities for sellers.

Topviewai said on its website that AI's live streaming services could cost around $1 per minute. Instead of spending on studio rentals, a sample of human host labor, companies can have one person monitor the live stream, Wu said. This will help reduce costs while increasing sales and increase the return on investment “quite good,” he added.

However, efficiency improvements are not cheap.

Therefore, for now, small and medium-sized enterprises are limited to adopting AI on a small scale. For example, using AI chatbots for relatively simple tasks can reduce labor costs as subscriptions for such services tend to be cheaper. In addition, according to RMIT Vietnam's Parida, business owners can also choose as there are a variety of third-party tools available in the market.

For example, fashion small businesses, Vietnam's food and beverage industry, are beginning to use chatbots to manage inquiries and orders, Palida said.

“What's more, there's a lot to pay,” he said.

Large companies can hire software companies to develop sophisticated systems customized to the needs of their business, but it's a luxury that many people can get.

Even companies with expertise to integrate AI itself pay a premium to do so.

For example, Lita Global spends around $2,000 per month on AI, part of which is spent on purchasing tokens for Openai's Application Programming Interface (API). The API allows businesses to build on Openai's model instead of requiring companies to build AI models from scratch.

However, as AI improves, the costs of use are expected to decrease. Research and advisory firm Gartner predicted in February that by 2027, the average price of Genai's application programming interface would fall below 1% of the current average price for the same technology.

That could mean even more affordable for small businesses employing AI in their businesses.

In emerging markets like Southeast Asia, where labor costs are low, companies may feel less motivated to increase efficiency through technology adoption. But technology is “much better” [outcomes]”Because of existing business practices, says Wirtz of NUS Business School. AI is another way of adopting technology.

He compared it to the widespread use of electronic hailing services. This reduced the risk of tourists being scamned by foreign taxi drivers, as the e-hailing app could estimate travel prices.

And according to Parida, there is a tech-savvy population of entrepreneurs in economies such as Vietnam, where labor costs are low, according to Parida.

“It's a very hungry young man,” he said.