It is no secret that Southeast Asia is one of the fastest growing regions for mobile penetration. This translates into an opportunity for businesses to boost their social commerce potential.
Messaging apps dominate the realm of social interactivity with Line and Facebook taking up the largest share of the market.
These platforms allow companies to inform, capture and sell to new customers by making use of the latest technological tools available to them, rapidly expanding their customer base. While chatbots, as a concept are not new to the tech world, never before they have entered mainstream businesses as today.
Southeast Asia houses the world’s largest customer-to-customer (C2C) market, this is particularly the case in Thailand where most young consumers directly buy items displayed on social networks such as Facebook, Line and Instagra
Here is where bots ‘step in’ and can drive and facilitate sales by simulating human alike conversations with customers, while carrying out repetitive tasks. In fact, chatbots are already very well incorporated for mobile, even more so than apps, with messaging at the heart of the mobile experience.
In 2016, Facebook launched chatbots to its messaging app Messenger, allowing customers to talk within the same interface with bots, in a similar way they would talk to a human shop seller.
The advantage of chatbots is that they can recreate the essence of conversational commerce, prompting businesses to initiate conversation directly with their target consumers in a highly personable way.
Thus, many Asian companies are turning to chatbots to help automate and scale their activity. The chatbot ecosystem in the Asean region is already robust, encompassing many different third-party chatbots, native bots, distribution channels, and enabling technology companies.
However, “there is a large mismatch in the way chatbots have taken off in Asia and how the rest of the world interact with them”, Murat Ozmerd, co-founder at Flow.ai, notes.
To better understand how bots could shape the future for companies in Southeast Asia, it’s useful to concentrate on what type of bots.
Let’s focus on the messenger bots which roll out within Facebook Messenger or Line. A good example is Auntie Reply a chatbot released by Unilever in Thailand.
One of its brands, Knorr, was seeing declining sales even as the brand’s market share remained strong.
The company realised that the category was shrinking, and the main challenge was Thai mothers’ fast-paced lifestyle, so they tried to bring back the tradition of home cooking by inspiring and helping moms to cook.
With mothers glued to their mobile phones and chatting on Line all the time, they turned Knorr’s official account on Line in moms’ trusted food engine.
The result was a 50% increase of consumption per households and 7.6% sales increase after months of stagnant sales performance.
Most importantly the chatbot triggered a brand recall increase of more than 32%, according to Mindshare Thailand.
The advantage of using chatbots for ecommerce or online shopping is that they could become the ideal personal shopper allowing customers to browse and search for a perfect item in a matter of seconds/minutes, or selecting cooking ingredients for the food we serve on the table.
They can give customers highly personal shopping suggestions based on their past shopping patterns, taste, interests, age and gender.
In terms of industries, chatbots are quite widespread with greater penetration found in some sectors, a slight prevalence in transport, retail and financial services. For example, Singapore based bank POSB rolled out a chatbot for general enquiries on its products and services.
OCBC’s chatbot focused more specifically on home loans helping to successfully closing S$10m (US$7.22m) new loans in three months. As per consumer brands, an example is Shiseido’s beauty counselling chatbot Beau-co in Japan, which can currently advise users on make-up tips and product information about eye-shadow, mascara, eyeliner and so forth.
Philips Lighting Singapore chatbot on Facebook Messenger provides product recommendations to assist customers’ lighting decisions.
On the other hand, chatbots such as Bus Uncle claims to have 12,000 monthly active users on Facebook messenger and has a strong personality, speaks Singlish and tells jokes.
Ninja Van chatbot helps check package delivery status. Another example is Airasia’s Ticketbot. This bot helps customers to find a fare for any Airasia route with easy commands like ‘I want to fly from Jakarta to Singapore’.
Artificial Intelligence (AI) has already reached an evolutionary stage that allows an increasing sophistication of the interaction between human and robot, and in most cases chatbots proved to handle some of the requests better than humans.
For example, chatbots are much faster than customer service representatives: no phone calls, no waiting time, no “hold on please, all our operators are busy”, no anger and frustration: imagine you could change your seat for a flight you booked in a matter of seconds via a chat versus 10 minutes over the phone.
Moreover, the bot never gets irritated like a person on the other side of the phone might, it can handle multiple customers at once, and it is unlikely to get distracted by a mobile phone or surrounding environment.
More and more chatbot types enable service functions and answer questions and support customers in an automated, faster and more efficient way. However, changing the medium isn’t going to solve all of a company's’ problems when dealing with customer support, because it depends a lot on the quality of the bot.
Some of the chatbots on the market fail because of poor planning. The common mistakes companies made include “not clearly defining the purpose of chatbots, setting ambitious goals ahead of what chatbots can deliver today, and rushing through the testing phase before launch”, Wang Xiaofeng, a tech analyst at Forrester, told The Asean Post.
So, what should we expect in the near future from chatbots development? More opportunities, further automatisation and maybe more job losses across industries? According to Maurizio Cibelli, Founder of Hutoma, it’s likely that in the next five years we will see greater adoption by companies.
“Having chatbots handling simple repetitive tasks can free up people so they can manage more complex problems that are beyond a computer reach at the moment,” he said.
However, he notes “perhaps most jobs lost, like those of customer representatives will morph to AI creator”, meaning they will be there to train chatbots how to manage new situations and get smarter.
Chatbots are going to replace humans for specific tasks only. The right balance of “bot” and “human” is still needed, it could be seen more as a digital colleagues’ partnership increasingly growing into the future rather than a disruptive force.