The Meta and Bain & Company report highlights India’s rapid digitization, with over 650 million Indians using social media and messaging platforms. Despite this, only 30% of these 200 million users shop online. Similarly, just 15% of the 30 million registered small businesses sell online. It indicates a significant untapped opportunity, as most potential online shoppers and sellers already engage in the digital space.
World’s Leading High-rise Marketplace
The Meta and Bain & Company report states that most apps target India’s 200 million savvy digital users. Still, adoption beyond top categories (social media, messaging, entertainment, UPI, and horizontal marketplaces) is limited. In high-frequency categories like grocery and banking, app usage peaks at 35 million monthly active users. Signs of app fatigue are emerging, with many users finding app downloads frustrating and abandoning purchases when prompted to install apps. The following 450 million non-savvy users prefer assisted shopping and need help with app navigation due to limited phone storage and other issues.
The report suggests that the app-led model may plateau, pushing businesses to explore new customer engagement methods. Chat-based assisted journeys on popular platforms like social media and messaging can enhance user transactions. Currently, consumers engage with businesses informally on these platforms. Over 50% of surveyed users prefer conducting transactions via conversational journeys for tasks like banking, travel, and utility payments.
Scaling these conversational journeys is challenging. Large enterprises use AI chatbots for simple tasks but still need human help for complex interactions. Small businesses, limited by resources, are hesitant to invest in automation. An affordable, intelligent AI solution is essential for seamless end-to-end journeys.
Generative AI-powered assistants, offering contextualized and humanlike interactions, can scale these journeys more efficiently. Tech giants’ growing investments in generative AI platforms will further enhance consumer engagement in this new era.
Conversational platforms
According to the Meta and Bain & Company report, Indian businesses engage customers through multiple channels, such as SMS, email, contact centres, websites, and apps. Despite significant spending on traditional channels, their effectiveness and ROI are declining due to spam and low engagement. Consequently, businesses are experimenting with conversational platforms which offer high engagement and personalized interactions.
Over 60% of large enterprises plan to increase spending on conversational platforms in the next three to four years, focusing on creating end-to-end journeys. Generative AI is a priority, with about 95% of enterprises familiar with it and over 80% planning to invest in generative AI solutions soon.
Small and medium businesses (SMBs) need help with customer acquisition and digital storefront management, often relying on offline marketing. Conversational platforms can help by improving discoverability, commerce, payments, and communication. Notably, 15 million SMBs use WhatsApp for Business to enhance their digital presence and drive traffic.
Adopting conversational platforms and generative AI will boost conversational commerce, facilitating transactions like ride-hailing, loan disbursals, and grocery purchases through conversational journeys. Large online platforms will lead this trend with proprietary chatbots and AI-assisted journeys, while offline SMBs will leverage existing conversational platforms to transition to digital commerce. Service-based transactions, such as utility bill payments and ridesharing, will drive user adoption and transaction volumes on these platforms, particularly in domains with frequent transactions.
Online shoppers
India is at a pivotal moment in its digital evolution, with many potential future online shoppers and sellers already engaged within the digital ecosystem. It indicates a significant, untapped market opportunity for businesses to convert these users into active online consumers and merchants.
Image source: BRAIN & COMPANY
The study also emphasizes that conversational platforms will impact more than huge organizations. Consumers desire to interact with small and medium-sized businesses (SMBs) through conversational platforms. According to a poll, 90% of non-tech-savvy digital users prefer to engage with SMBs using conversational platforms for their daily requirements.
According to their survey, 70% of users preferred connecting with local grocery stores to send a list of items and place an order. Additionally, 65% of users preferred connecting with local restaurants to receive offers and place an order. Furthermore, 80% of users preferred using a conversational platform to raise service tickets, manage warranties, or request technician visits or spare part replacements.
Conversational platforms have the potential to greatly benefit small and medium-sized businesses (SMBs) by tackling essential challenges such as improving visibility, organizing product information, managing orders, facilitating payments, and enhancing customer interaction. It enables small and medium-sized firms to join the conversational economy readily.
The report unequivocally emphasizes that the potential offered by generative AI and conversational commerce is extensive and revolutionary. Businesses may create a successful strategy by implementing six necessary actions:
- Redesigning customer journeys
- Expanding customization
- Developing new indicators of trust, including generative AI
- Expanding experimentation
- Defining a measuring framework for discussions
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