AI or Stagnation: Southeast Asian Small businesses choose between adaptation and extinction

Against the background of the rapid development of artificial intelligence, small enterprises in Southeast Asia are faced with a choice: rapid implementation of new technologies or loss of market position. Despite the dominance of the United States and China in the global AI agenda, experts assess the region's potential as significant, especially taking into account demographic and digital characteristics.

Generative AI and related technologies could add an additional $120 billion to Southeast Asia's GDP by 2027, according to the Boston Consulting Group. Google Report e-Conomy SEA 2024 confirms the high interest in AI in the region: Singapore, Malaysia and the Philippines entered the global top 10 in terms of the number of search queries related to artificial intelligence.

Jochen Wirtz, a marketing professor at the National University of Singapore, noted that for small businesses, the issue of implementing AI is becoming existential. Companies that do not adapt will either be integrated into large franchise structures or completely pushed out of the market.

Digital youth as a driving force

In the region, a significant proportion of small business owners are under the age of 40. According to the CPA Australia survey for 2024-2025, Vietnam, Malaysia and the Philippines show the highest level of young entrepreneurship in Asia. This demographic is rapidly embracing digital tools and actively integrating technology into business practices.

Soumik Parida, program manager at RMIT University Vietnam, notes that the region's young people have a high technological sensitivity and global orientation: "They are ready to master any innovations and confidently enter the international level."

Most popular usage scenarios

According to a joint study by Lazada and Kantar, in the six largest economies in the region (Singapore, Malaysia, Vietnam, Indonesia, the Philippines, Thailand) AI is most often used in customer service, marketing, and advertising. A McKinsey report released in March showed that 63% of companies use generative AI for text content, mainly in sales and promotion.

For a region with high language fragmentation, the technology becomes a tool not only for personalization, but also for instant translation of marketing messages into local languages.

Example: Lita Global

Lita Global, a social platform for gamers from Indonesia, has almost doubled the number of monthly events since the integration of OpenAI models in the second half of 2023. The company claims that each event generates revenue growth of 20% per week. Translations of announcements from English to regional languages, including Vietnamese and Thai, are automated, allowing staff to focus on organization and scaling.

AI is also used in the platform's chat functions. Gamers who can be hired to play together receive AI hints to communicate with potential customers. According to CEO Yihao Zhang, the use of AI recommendations allowed to increase the number of orders by 10-20%.

New Frontier: AI in e-commerce broadcasts

Automated direct trading - AI livestreaming — has become one of the most promising areas for micro and small businesses. This format, which is gaining popularity in the region, allows you to demonstrate products and interact with the audience in real time.

TopviewAI offers AI broadcast services for $1 per minute. According to CEO Jensen Wu, a single broadcast requires only one operator, rather than a studio, equipment and host, which significantly reduces costs. In conditions of limited budgets, such solutions provide small businesses with a sales tool with acceptable profitability.

Financial constraints and prospects for cost reduction

Despite the growing interest, the high cost of AI technologies remains a major obstacle. Small companies are limited in their ability to implement AI and use it on a point — by-point basis-in the form of chatbots, support systems, or order processing automation.

Even independent integrations are expensive. For example, Lita Global's monthly expenses for using the OpenAI API are about $2,000. However, Gartner estimates that by 2027, the average cost of API access to generative AI will drop to less than 1% of the current level. This creates the prerequisites for mass availability of AI among small and medium-sized businesses.

The future of the region

Although labor costs remain low in the emerging economies of Southeast Asia, technology can significantly improve the efficiency of processes. Wirtz compared this to the effect of introducing taxi hailing apps: they made trips transparent and safe, despite the presence of traditional services.

According to Soumik Parida, the young population of the region's countries continues to show a high interest in AI, despite limited budgets: "These are young people who are eager for development." The combination of digital literacy, mobility and entrepreneurial spirit makes Southeast Asia one of the most promising areas for technological growth in small businesses.