Customer Experience and Business Expansion Driving Conversational AI Investments in Asia Pacific, including Philippines

Global cloud communications platform Infobip has commissioned the latest market research prepared by leading IT market research and advisory firm IDC. The IDC InfoBrief titled “Revolutionizing Customer Experience through the Power of Conversational Commerce” highlights the rising role of AI-powered conversational commerce and omnichannel communication platforms in the Asia Pacific region. The InfoBrief not only highlights the importance of customer-centric strategies but also provides a guide for brands to successfully adopt and leverage conversational commerce, ultimately maximizing value for both businesses and customers.

New research reveals Asia Pacific companies increasing investments in cloud-based solutions for enhanced customer experiences and operational efficiencies.

Filipinos are one of the most active social media users globally, spending almost four hours on social media per day. Their inclination to actively like, comment, and engage on social media sets them apart from other nationalities, providing brands with a powerful tool to connect with their customers.

Digital native customers, like the Filipinos, are setting higher expectations and exercising greater control over how they engage with brands, becoming equal stakeholders in the Customer Experience (CX) ecosystem. This has resulted in brands moving from traditional transaction-level experiences to relationship-based ones. Cloud-based solutions enable brands to provide the end-to-end customer journeys that customers desire in this digital age.

With the shift in customer communication preferences, there is a noticeable increase in conversational interactions. Recent statistics demonstrate that brands adopting an omnichannel approach and delivering an end-to-end experience have higher chances of enhancing loyalty and customer lifetime value. Capitalizing on the advancements in artificial intelligence, conversational commerce has gained significant traction among businesses in the Asia Pacific region, utilizing Communication Platforms as a Service (CPaaS) as its core foundation.

Rising Demand for Conversational Commerce

Conversational commerce relies on Communication Platform as a Service (CPaaS) as a crucial tool, empowering organizations to seamlessly integrate real-time communication features (such as voice, text, video, instant messaging, and social media) into their internal and external applications using developer-friendly API as building blocks. Software as a Solution (SaaS) tools such as smart chatbots powered by the cloud are also on the rise, as organizations recognize their inherent benefits to deliver personalized interactions and improved customer experiences.

Taking full advantage of Filipino’s social media habits and willingness to engage with brands, conversational commerce solutions are increasingly being used by businesses in the Philippines’ rapidly growing digital economy. In fact, 64% of organizations in the Philippines are already using CPaaS solutions to enhance customer experience, to aid in local and overseas business expansion and to improve and mobilize business processes*, finds the IDC InfoBrief.

The power of CPaaS and SaaS-based solutions enable businesses to provide a seamless, customer journey that’s visible across multiple touchpoints. This reflects a general pattern among businesses in Asia Pacific adopting a more conversational theme with their customers to gain benefits such as increased ROI and customer engagement. Conversational commerce also empowers local businesses to branch out globally through automated messaging and cloud customer support.

“As businesses embrace the potential of conversational commerce, they position themselves to forge ahead, leveraging AI technology to create meaningful connections and unlock new growth opportunities. Organizations need an actionable, customer-centric strategy and the ability to invest in the right set of tools to grow the business and keep customers happy. By aligning their strategies with conversational commerce, businesses can proactively meet customer expectations, enhance engagement, and establish long-lasting relationships. This transformative approach empowers organizations to stay ahead in a dynamic marketplace”, said Velid Begovic, Vice President of Revenue at Infobip.

Drivers of CPaaS investment Across Asia Pacific

This upward momentum in customer-centric business strategy among brands across Asia Pacific reflects their current mindset and expectations. Despite a few countries averaging 50%-59% in CPaaS usage, the vast majority of organizations in the region (70%) plan to increase communication platform spending over 2023-24 in order to provide unique, unparalleled customer experiences to the region’s growing social media users, who are mostly young, active, and aware of the power of their own influence. In the Philippines, 63% of organizations plan to increase their communications platform spending over 2023-24 as they aim to leverage conversational commerce to offer distinctive customer experiences.

Although all countries plan to invest in CPaaS and SaaS solutions in the near future, their motivations for doing so can greatly differ. Singapore and Indonesia businesses aim to bring about enhanced customer experiences and create new revenue streams, while those in China, Thailand and the Philippines are more motivated to improve and mobilize their business processes, as well as look towards domestic and international business expansion. This is likely due to the latter countries’ overall higher adoption rate of CPaaS solutions (above 60%) and booming retail/eCommerce segments.

“CPaaS solutions are increasingly recognized as crucial catalysts for enabling conversational commerce experiences. In fact, 27% of businesses in Asia Pacific are actively partnering with CPaaS platform providers to deliver contextualized customer interactions that not only boost profitability but also foster emotionally fulfilling engagements. This trend highlights the increasing importance of leveraging these technologies to meet customer demands and achieve business success,” said Nikhil Batra, Research Director, Telecommunication, IDC Asia/Pacific.

Organizations planning to embark on their conversational commerce journey will need a good, experienced partner as not all solutions are equal. Platforms with omnichannel capabilities are ideal as they are essential for building meaningful, high-quality customer engagement. Easy integration capabilities are also necessary because these ensure better customer experience as well as compliance with security and audit policies. Finally, CPaaS platform providers must be agile enough to respond to new use cases and tech that can help drive business growth. Infobip is ready to help elevate businesses through conversational commerce so that they are on par with the top businesses in Asia Pacific.

To learn more about the benefits of conversational commerce and how it has influenced industries across Asia Pacific region, please visit https://tinyurl.com/4u92vmpj.

*Source: IDC InfoBrief, commissioned by Infobip, Revolutionizing Customer Experience through the Power of Conversational Commerce, Doc #AP241426IB, July 2023.