Summary
Southeast Asia is embracing artificial intelligence at a rapid pace. But the business of making money from AI is about more than getting consumers to …
Generative AI adoption in the region has reached around 243 million people in less than three years, according to the annual e-Conomy SEA report released Wednesday by Google, Temasek and Bain & Company.
That is equivalent to 58% of the working population, with adoption occurring four times faster than the uptake of mobile internet. Yet only 1% to 2% of the region's population pays for personal AI subscriptions, highlighting a gap between widespread adoption and direct consumer spending.
Florian Hoppe, a partner at Bain & Company, told CNBC in an interview that businesses have found other ways to generate AI's commercial value from online shopping to digital advertising.
Companies have been using AI to improve e-commerce conversion rates and handle routine customer inquiries, allowing employees to focus on other tasks, he added.
Consumers may also be paying indirectly for AI when purchasing products developed using the technology.
The findings come as Southeast Asia's digital economy is projected to grow 17% to $368 billion in gross merchandise value this year, with the market expected to exceed $1 trillion by 2035, according to the report.
Hoppe also pointed to another factor driving the region's enthusiasm for AI: its willingness to embrace new technologies as consumers have shown what he described as "pragmatic optimism" toward AI, embracing the technology for its practical benefits.
The region has historically ranked among the most active users of major digital platforms on a per-capita basis.
"They're very experimental," Hoppe said, describing consumers' openness to new tools and services. He also added that in terms of individual markets, Singapore is among Southeast Asia's early leaders in AI adoption.
That openness is extending to more autonomous uses of AI, with 75% of users willing to let AI agents find the best prices and complete purchases on their behalf. The report shows that confidence is also growing, with 62% of respondents saying they trust AI tools more than they did a year ago.
Despite the rapid adoption, people in Southeast Asia still use AI far less than those in the U.S., with usage per person at just 10% of U.S. levels.
For businesses, however, the potential returns are becoming more tangible. About 69% of shoppers use AI to compare complex purchases such as electronics, while early case studies show AI helping businesses boost conversion rates by 10% year on year and increase the average amount customers spend per order by as much as 75%.
An example is Shopee, a Southeast Asian e-commerce platform, which now handles approximately 80% of customer queries through AI chatbots, helping cut its cost per customer contact by 30% year on year.
In online media, Hoppe pointed to a "significant uplift" in advertising click-through rates and conversions through AI-powered advertising and improved targeting.
But the benefits extend beyond online shopping. AI is helping travelers plan trips, making digital advertising more effective and enabling voice-assisted bookings for ride-hailing and food delivery services.
Southeast Asia's online travel market is projected to grow 10% to $59 billion in gross merchandise value this year. Online media revenue, including digital advertising and streaming, is expected to rise 22% to $44 billion, while ride-hailing and food delivery are forecast to grow 15% to $40 billion in gross merchandise value, according to the report.
Source: CNBC
