By Abhik Sen
Bots that chat with you and help you buy stuff are the new rage in e-commerce
For those of us who love buying fresh vegetables from the neighbourhood store daily, the Covid-19-induced lockdowns were a stressful time. Using WhatsApp as a notepad to make lists of things one needed to buy—which many people were prone to do—one had to first send the list to the grocer on the messaging app and hope that he checked it before the fresh produce was sold out; next, one had to wait for the grocer to get back with the bill and then make the payment via an e-wallet or UPI. Sometimes, one would even have to call the grocer to confirm that the payment was made, and then wait for the delivery to happen. The stress then led to many daily shoppers, like a relative based in Kolkata, to make—horror of horrors—weekly purchases.
After the lockdowns were lifted, the daily shoppers were back at their favourite neighbourhood grocery stores. My relative, a retired corporate executive, too, went back to his old routine, but a service he started using recently is causing some disruption in his habits. The service in question is JioMart on WhatsApp, which helps him order groceries and provisions in an interactive and seamless manner. And the convenience has convinced him to give his daily morning trips to the local grocer a miss.
But grocery is just one way you can use the messaging app. According to Ravi Garg, Director of Business Messaging-India, at Meta, you can also buy tickets for the Bengaluru metro on WhatsApp, and scan the e-ticket to board the train; and even book an Uber cab! These types of transactions on messaging apps are called conversational commerce, a term believed to have been coined by Chris Messina, the inventor of the hashtag, in 2015.
What exactly is conversational commerce? According to experts, conversational commerce is shopping on a messaging platform, where a chatbot engages in a conversation with a customer and helps her to buy a product, which is usually a small-ticket item. According to Prashant Garg, Technology Consulting Partner at EY India, conversational commerce usually involves products like apparel, fashion products, FMCG, fresh foods or other consumer goods. He adds that if a generative AI-powered chatbot starts conversing with customers, a third of them end up buying a product. “The bot has methods and a mechanism built in to engage with customers and keep them engaged till the decision to buy is made,” he says.
According to independent data platform Statista, total spending over conversational commerce channels worldwide will jump to $290 billion in 2025 from $41 billion in 2021. And while the market is still nascent in India, it has huge potential. According to Akhilesh Tuteja, Partner & Head of Technology, Media and Telecommunication at KPMG in India, India is home to the largest consumer base for the biggest conversational commerce enablers. “India is home to more than 600 million smartphones with one of the cheapest internet connections in the world. This infrastructure, along with the reach provided by these platforms and vernacular accessibility through voice commands, sets the right platform for Indian as well as global brands to penetrate the Tier II and Tier III cities. The new generation in these cities is more aspirational, tech-savvy and has increased disposable income,” he says. Although India is a long way from China, it still has 200 million-plus online shoppers, 65 million-plus MSMEs and $100 billion in gross merchandise value (GMV) today—the total addressable market for conversational commerce is huge, he adds. EY’s Prashant Garg agrees. “In two years’ time… we will be nearly a quarter of whatever China is now,” he says.
No wonder that for Meta, conversational commerce, or ‘business messaging’ as the company calls it, is its next big bet. In India, its tie-up with JioMart is significant since WhatsApp had more than 500 million users in India per an IT ministry release in February 2021, while JioMart—part of billionaire Mukesh Ambani-led Reliance Industries—has more than two million merchant partners. The tie-up was a “lighthouse example” for the world, Nicola Mendelsohn, Vice President of Global Business Group at Meta, had told BT in an earlier interaction, adding that all types of businesses were already working organically on WhatsApp.
Ravi Garg says that since the roll-out of the service in late August, a lot of businesses have approached Meta and shown interest in building a similar experience. “We built the business platform—WhatsApp—and it can enable any type of business on the platform,” he says. Business messaging can be used across all of Meta’s platforms, and Ravi Garg says that the company is looking at three ways to monetise its messaging platform. First is the WhatsApp Business App, which is free to use for small businesses; now, Meta is planning to add a subscription layer, which will give users access to advanced features. Second, its WhatsApp Business Platform API, which is for medium and large businesses. Here, businesses are charged for conversations they have with customers. The third revenue stream is click-to-messaging ads, wherein, by clicking on an ad on Facebook or Instagram, one lands on a messaging conversation.
Meta’s bullishness on business messaging in India is backed by research. According to a Kantar survey commissioned by Meta in April 2022, more than 70 per cent of Indians surveyed said they prefer to message businesses rather than send emails, call or visit their website, while 75 per cent said they are more likely to do business with/purchase from a company that they can contact via messaging. The survey adds that 86 per cent of adults in India message a business at least once a week, considerably higher than the global average of 66 per cent.
Ravi Garg says that business messaging provides customers with a personalised experience, something that shopping online generally lacks. EY’s Prasahant Garg adds that if an AI-powered chatbot is at work, it can provide customers with a personalised experience that even a brick-and-mortar store is unable to, since the bot has to engage with a single customer while a shop assistant has to attend to many. He adds that AI-powered chatbots can be added to existing websites or apps to drive customer engagement. This is done by using turnkey solutions powered by conversational AI that uses data, machine learning, and natural language processing to imitate human interactions, recognise speech and text inputs, and translate their meanings across languages. For instance, software giant IBM has such a solution called IBM Watson Advertising Conversations, which helps facilitate personalised AI conversations with consumers virtually anywhere online.
While the space is set to grow rapidly in India, it is not without its challenges. Tuteja of KPMG in India says that customising and training a conversational AI product in a country with around 22 official languages along with the required accuracy, is possibly the biggest challenge. The next challenge is enabling security and privacy for the users of the conversational AI product in a manner compliant with the local laws, he says, adding that ensuring human bias and examples of unethical behaviour from the training data do not pass into the AI is another big challenge.
Meta’s Ravi Garg says that for WhatsApp, user privacy remains at its core, despite it being open for business. “Messaging is the best way for people and businesses to connect, and India has led that transformation on WhatsApp. The scale, use-cases, and new buying experiences from the region are things we are really excited to see. What’s happening on WhatsApp in India is inspiring our customers all over the world. With business messaging as a top priority for Meta, we’re committed to helping businesses of all sizes in India to build valuable journeys on WhatsApp and keep innovating in this space,” says Matt Idema, VP of Business Messaging at Meta.
As for my Kolkata-based relative, he is happy with the convenience afforded by technology as it offers him more time for other pursuits. Wonder what other chatbots he will start conversing with next.
@abhik_sen
Sourced from btMAG
