The U.S. and
China are usually top of mind when it comes to artificial intelligence and
generative AI. But Southeast Asia’s small businesses have huge potential that
shouldn’t be ignored, experts say.
In fact, it’s a
matter of survival, according to Jochen Wirtz, a professor of marketing at the
National University of Singapore Business School, who said those that fall
behind will be “moved into a franchise business or will be pushed out of the
market by bigger players who do it.”
“Either you grow
and adopt, or you die,” he added.
AI and genAI
will contribute about $120 billion to the region’s gross domestic product by
2027, Boston Consulting Group projected in an April report titled “Unlocking
Southeast Asia’s AI Potential,” which cited the technology’s potential to
“redefine business processes and unlock new revenue streams.” And Google’s
e-Conomy SEA 2024 report found that Singapore, the Philippines and
Malaysia are ranked among the top 10 globally for AI-related searches and
demand, indicating “curiosity” and an “active interest” within the region.
Youth is an
advantage. Among surveyed countries in the Asia-Pacific, Vietnam, Malaysia and
the Philippines have the highest percentage of business owners or leaders under
40 years of age, according to CPA Australia’s Small Business Survey
2024-25.
For countries
such as Vietnam, “the future is bright because ... it’s a very young
population, is a very internet-savvy population,” said Soumik Parida,
associate program manager of the professional communication program at RMIT
University Vietnam’s School of Communication and Design. “They are starting to
have a global voice and they’re very easy to adapt any new technology,” he
added.
Here’s how some
of the region’s businesses are using it to stay on top of the competition — as
well as the opportunities and roadblocks they face.
Most popular
use cases
Customer service
is the leading use case in Southeast Asian e-commerce, followed by marketing
and advertising, according to a joint report by Lazada and Kantar about
AI adoption trends in the six largest economies in Southeast Asia. Also known
as the ASEAN-6, they comprise Singapore, Malaysia, Vietnam, Indonesia, the
Philippines and Thailand.
A McKinsey
survey released in March revealed a similar trend: Companies have adopted
genAI for marketing and sales, with tech companies leading the charge. It also
showed that most adopters are using the technology to generate text, with 63%
of surveyed companies reporting that they do so.
GenAI presents a
unique boon for a region as linguistically diverse as Southeast Asia: Aside
from writing personalized marketing messages, it can also translate promotional
texts into different languages.
For example, Lita
Global, an Indonesia-based social media platform for gamers, is benefiting a
lot from that. Since integrating OpenAI’s models in the second half of last
year, it said, it has been able to host almost twice as many online gaming
events monthly, thanks to greater efficiency.
That’s a big
boost for its business, since every event can raise weekly revenues by an
average of 20%, the company said.
With genAI,
employees can quickly translate announcements about events from English to
Southeast Asian languages, such as Vietnamese and Thai, to reach more users in
the region. And that frees them up — time originally used for writing,
translating and formatting promotional text can now be used for organizing more
revenue-generating events, according to Lita Global.
The company also
uses genAI in its chat function to recommend responses to users. Lita Global is
a social platform where users can hire other gamers to play with them online.
Gamers for hire
typically chat with users before an order is placed for a gaming session. But
that can be difficult when demand for gamers is high and gamers for hire are
busy with other matches. Gamers for hire who use the AI-recommended responses
have seen a 10% to 20% uptick in orders, said Lita Global’s CEO Yihao Zhang.
“So we’re using
AI to really help them to improve their efficiency, to help them to be more
available to the users,” Zhang said.
Another way
Southeast Asian MSMEs (micro, small and medium enterprises) can use genAI in
marketing is through AI livestreaming. Google’s SEA e-Conomy report noted that
live shopping has become more popular in the region. Live shopping, or
livestreaming, usually involves a host showcasing the products for sale. Not
only does this include clothing try-ons, but shoppers can also ask questions in
the comments section, which are answered in real time.
While
livestreams are traditionally hosted by humans in studios, MSMEs may lack the
funds or technical know-how to execute regular livestreams to boost sales. AI
livestreaming can open doors to new opportunities for sellers, said Jensen Wu,
CEO of TopviewAI.
TopviewAI says
on its website that its AI livestreaming services can cost around $1 per
minute. Instead of spending on studio rental, samples of the merchandise and
labor of human hosts, companies can have one person monitor the livestream, Wu
said. That helps lower costs while boosting sales, making for a “pretty good”
return on investment, he added.
The problem
of costs
The efficiency
boost doesn’t come cheap, however.
That’s why small
businesses are limited to adopting AI on a small scale for now. Using AI
chatbots for relatively simple tasks, for example, can reduce labor costs as
subscriptions for such services tend to be inexpensive. On top of that, with a
variety of third-party tools available on the market, business owners can also
have their pick, according to RMIT Vietnam’s Parida.
Small businesses
in the fashion, and food and beverage industries in Vietnam, for example, have
begun using chatbots to manage inquiries and orders, Parida said.
“Anything beyond
that requires a lot of expense” he said.
While larger
companies can hire software companies to develop sophisticated systems
customized to a business’ needs, it’s a luxury not many can afford.
Even companies
that have the expertise to integrate AI themselves pay a premium to do so.
Lita Global, for
example, spends about $2,000 on AI every month, part of which goes to
purchasing tokens for OpenAI’s application programming interface (API). APIs
allow companies to build upon OpenAI’s models, instead of requiring companies
to build the AI model from scratch.
However, as AI
improves, the cost to use it is expected to drop. Research and advisory firm
Gartner predicted in February that by 2027, the average prices of application
programming interfaces for genAI will fall to less than 1% of the current
average price for the same technology.
That could mean
even greater affordability for smaller businesses adopting AI for their
businesses.
Outlook for
the region
In emerging
markets such as those in Southeast Asia where labor costs are low, companies
may feel less motivated to boost efficiency through adoption of technology. But
technology can provide “much better [outcomes]” for existing business
practices, said NUS Business School’s Wirtz. AI is just another way to adopt
technology.
He compared it
to the popularization of e-hailing services, which reduced the risk of tourists
getting scammed by taxi drivers in foreign countries, as e-hailing apps could
estimate the price of a journey.
And with a
tech-savvy population of entrepreneurs in economies such as Vietnam, where
labor costs are low, the excitement to adopt AI remains high, according to
Parida.
“It’s a very
hungry young people,” he said.
Source: CNBC (Southeast
Asian small businesses using AI to stay competitive)
Published 25 Jun
2025
July 21, 2025
