Generative AI: The Game-Changer for Malaysian E-commerce Success

Have you ever spoken with colleagues about a new watch release and then seen an ad for that exact watch while swiping through videos at home? Many of us have experienced this, and it shows how e-commerce is leveraging AI. However, the adoption of AI in e-commerce goes beyond that. Today, many e-commerce companies are leveraging generative AI to make their processes more efficient.

What’s the Difference? Traditional AI vs Generative AI

AI is no longer a foreign concept, but what is generative AI? Though both share similarities, there is a stark difference between traditional AI and generative AI:

Traditional AI: Traditional AI, often known as Narrow AI or Weak AI, is designed to perform specific tasks using set rules and algorithms. Think of it like a computer that plays chess—it knows all the moves and can predict your next move based on a pre-defined strategy. It excels at recognising patterns and making decisions within its programmed limits but doesn’t create anything new. Examples include voice assistants like Siri and Alexa, recommendation systems on platforms like Netflix and Amazon, and Google’s search engine. These systems are highly effective at what they do, operating within a predictable framework, making them ideal for tasks requiring consistency and precision.

Generative AI: Generative AI, on the other hand, focuses on creativity and generating new content. This type of AI uses machine learning models trained on vast datasets to produce text, images, videos, and more. Popular tools like ChatGPT and DALL-E are perfect examples. They can create unique and original content based on the patterns they have learned from their training data. Unlike traditional AI, generative AI is adaptive and capable of handling unstructured data, producing diverse and innovative outputs.

Source: Eklavvya

AI Boosts E-Commerce Growth in Malaysia

According to a 2023 report by the Department of Statistics Malaysia (DOSM), there is a 5.4% increase year-on-year (y-o-y) in e-commerce revenue, contributing RM289.5 billion to the country’s GDP. This increase is due to increased smartphone usage, improvements in online payment systems, and a growing number of customers who prefer online shopping.

The Malaysian government actively supports and empowers the e-commerce industry through initiatives like the Digital Free Trade Zone (DFTZ) and the Digital Economy Blueprint. These efforts create a favourable environment for e-commerce businesses to flourish by offering benefits such as tax incentives, infrastructure development, and regulatory support. This strategy attracts both local and international investors to Malaysia's e-commerce market.

In the rapidly changing landscape of e-commerce, generative AI is emerging as a transformative force, especially in Malaysia. With generative AI, e-commerce has seen innovations in personalising customer experiences and optimising supply chain operations. By leveraging generative AI, e-commerce businesses in Malaysia are enhancing their efficiency, driving sales, and providing better customer service.

Source: Department of Statistics Malaysia 2023

Real examples of how e-commerce is using AI: 

Grab Pioneers Adopting Generative AI to Improve Customer Experience 

Grab, aside from its e-hailing services, is one of the country’s most popular apps for food and parcel delivery. Recently, they announced their collaboration with OpenAI, pioneering strategies that integrate the development of AI tools tailored for Grab users and partners with the inaugural pilot deployment of ChatGPT Enterprise for Grab employees. Grab will tap into OpenAI’s technical and strategic prowess to collaborate on tailored solutions for Southeast Asian users, concentrating initially on three areas:

• Accessibility: Grab will harness text and voice capabilities to enhance the accessibility of its services, particularly for visually impaired or elderly users who might struggle with the app's on-screen interface.
• Customer Support: Grab will utilise AI technology to develop chatbots capable of better understanding and swiftly resolving user issues.
• Mapping: Grab will employ OpenAI’s vision capabilities to automate and improve data extraction from visual images, accelerating the updates for GrabMaps and enhancing the experience for both consumers and driver-partners.

As AI analyses vast amounts of audio and visual data, it improves the overall platform experience.

Lazada Uses AI & AR to Help Customers Find Skincare Solutions 

Combining AR and AI, Lazada, one of the leading e-commerce platforms in Malaysia, uses both technologies to innovate how customers find solutions for their skincare problems. Available in six countries in Southeast Asia, including Malaysia, this feature uses the camera to allow users to diagnose and analyse their skin. The feature understands skin conditions, including type and tone, sensitivities, and other concerns such as wrinkles, dark spots, and pores. Once the skin test has identified the user’s skin condition, users will then be recommended products that suit their needs or can overcome their skin problems.

This technology leverages generative AI, allowing e-commerce platforms to offer highly personalised shopping experiences. By analysing vast amounts of customer data, including browsing history, purchase patterns, and preferences, AI algorithms can create tailored recommendations and marketing messages. In Lazada’s case, it goes beyond suggested ads that appear in the app, as its combination with AR technology allows users a real-time approach to identifying solutions to their problems.

Source: Retail Asia

Shopee’s Sophie Achieved 80% Customer Satisfaction Rate 

Sophie, Shopee's AI chatbot, significantly enhances customer satisfaction by efficiently handling inquiries with a high success rate. In 2023, Sophie managed 18 million chats, resolving 80% of cases before escalating to human agents. Enhanced with neuro-linguistic programming, Sophie anticipates user queries and provides detailed solutions. This capability, along with improved customer service agent support and training, ensures rapid resolution of issues, contributing to Shopee's 80% customer satisfaction rate and maintaining a seamless shopping experience during peak periods.

Sophie significantly reduced the workload for live customer service agents, who were further supported by optimised processes, training, and incentives. This approach ensured swift resolutions across complex cases, minimising abandonment rates and maintaining high service standards throughout peak e-commerce periods.

Source: Shopee MY

Alibaba Automates Personalised Sales & Marketing Strategies 

Generative AI is transforming marketing and sales strategies by automating campaign creation and optimisation. AI tools can generate compelling product descriptions, create personalised marketing content, and manage targeted advertising campaigns. This automation frees up valuable time for marketing teams, allowing them to focus on strategic initiatives.

Alibaba.com is expanding its AI tools to support MSMEs in Malaysia and beyond by incorporating generative AI. These tools help businesses create high-quality product descriptions and marketing content efficiently. By leveraging AI, companies can enhance their digital presence, improve customer engagement, and streamline their operations, ultimately driving growth and competitiveness in the global market. According to the president, Kuo Kang, MSMEs who used AI on its platform saw an increase in product exposure by 37%. This innovation helps its vendors boost their audience reach and potentially their sales volume.

iPay88 Protects User Data and Prevents Fraud with AI

Generative AI plays a crucial role in enhancing data security and preventing fraud in e-commerce. AI algorithms can detect unusual patterns and behaviours indicative of fraudulent activities, enabling proactive measures to protect sensitive customer data.

One of the most popular e-commerce payment systems, iPay88, uses generative AI in its ZepSecure system for enhanced fraud detection and data security. This system includes setting transaction limits per user, detecting multiple card usages by a single user, and monitoring transaction quantities. ZepSecure employs advanced AI techniques to analyse transaction patterns and identify potential fraud in real-time, significantly reducing the risk of fraudulent activities. This adaptive, continuously updated system helps merchants safeguard their online transactions effectively.

The Future of Generative AI in E-commerce

The future of generative AI in e-commerce looks promising, with continuous advancements expected to further enhance the sector. Emerging technologies such as augmented reality (AR) and virtual reality (VR), powered by AI, will offer immersive shopping experiences, allowing customers to virtually try on products or visualise them in their environment.

Generative AI is undeniably boosting the effectiveness of e-commerce in Malaysia, offering numerous benefits from personalised customer experiences to optimised supply chain operations. By adopting AI-driven solutions, Malaysian e-commerce businesses can enhance their efficiency, drive sales, and provide superior customer service. As the technology continues to evolve, it will unlock new opportunities and set new standards for the e-commerce industry.

Embracing generative AI is not just an option but a necessity for businesses looking to stay competitive in the digital age. Excelerate can help businesses in their transition process to adopt the ever-changing landscape through generative AI training. Our Gen AI at Work and Gen AI for Data courses are curated to meet current market demands and are also recognised by the Malaysia Board of Technologists (MBOT). Excelerate has been helping businesses and organisations adopt AI through practical upskilling classes. These classes teach participants how to use AI tools effectively, boosting their productivity and efficiency. They also position professionals as forward-thinkers and give them the skills to face future challenges. By staying updated and using the latest AI technologies, e-commerce businesses in Malaysia can continue to grow and stay competitive in the digital market.

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