Mainland China, Hong Kong companies to benefit as AI penetrates deeper into customer experience, researcher says
- Generative AI can support innovation, content creation, product development, marketing and services, Euromonitor says
- Research company cites Chinese travel platform Trip.com as one example of a company that has scored direct benefits from AI
Nearly three quarters of global consumers are using AI to help in everyday tasks such as drafting correspondence, and many of them also expect companies to tap the same technology to help in their purchases, the research company said in a report released on Thursday. In China, 56.2 per cent of consumers said they used voice assistants this year while making purchases.
“Generative AI solutions support the innovation process, which could accelerate go-to-market strategies,” the report said. “Content creation and ideation can be achieved at speed for faster delivery. Businesses that leverage the capabilities of this technology can synthesise user data to guide new product development. Plus integrating customer inputs will help companies customise marketing campaigns, merchandise and services at scale.”
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According to Euromonitor’s global survey, companies expect AI to improve customer experience by creating more intelligent shopping suggestions based on consumer data (49 per cent), creating more targeted marketing campaigns (44 per cent), building customer-service chatbots (44 per cent), optimising product images and copy (43 per cent) and assisting with travel planning and shopping (42 per cent).
China-based travel booking platform Trip.com is one company that has seen direct benefits from AI, thanks to its AI travel assistant, known as TripGenie. Launched in July, the personalised travel assistant has “doubled conversion rates and increased user retention through improved user engagement and overall service efficiency”, according to the report.
The generative AI market will be worth US$1.3 trillion by 2032, compared with US$40 billion in 2022, according to a report released in June by Bloomberg Intelligence.
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“The revenue stream of the overall AI market experienced significant growth as the demand from FMCG [fast moving consumer goods] companies surged since the launch of ChatGPT in November 2022,” said Herbert Yum, research manager at Euromonitor. “After the first wave, other companies were taking a conservative approach to see if there was a successful case they could replicate in their business model. Therefore, we would expect a second wave of revenue growth in 2024 and 2025.”
Besides generative AI, high labour costs and demand for automation will drive the development of other AI-based solutions, such as in robotics, advanced data analytics and lean supply chain management, the report said. “Therefore, the outlook of the AI industry is bright over the forecast period,” Yum said.
Apart from AI, the Euromonitor report spotlights other consumer trends likely to prevail in the near future.
One is “value hacking”, which involves consumers looking for deals that allow them to buy premium products at a discount or find an alternative at a lower price point.
A company responding to this trend is Yindii, which has operations in Hong Kong and Thailand. The Bangkok-based app connects shoppers with local businesses like restaurants to purchase premium, surplus food at a discount.
In mainland China, Mixue Bingcheng, or Mixue Ice Cream & Tea, a specialty tea chain known for its affordable prices, has opened a franchise coffee chain known as Xingyungka, which offers coffee for as little as five yuan (US$0.69) per cup.
“This not only threatens affordable coffee chains, but also coffee chains that position at a premium price point like Starbucks and Luckin Coffee as consumers in China have more choices to find best deals,” Yum said, “Luckin Coffee and Cotti Coffee then started offering better deals to compete with Xingyunka.”
