After Facebook Messenger opened its platform to chatbots in 2016, it became the era of chatbots — more than 12,000 of them were deployed on Messenger by the end of that year. One year later, the number has risen to 100,000.
Despite rising popularity of chatbots around the world, they didn’t take off as expected in Southeast Asia given the region’s affinity for texting through messaging apps. This was especially true in the region’s biggest market, Indonesia.
Talent remains one of the biggest hurdles for AI or any other type of tech development in Indonesia, however, it is the inconsistency of the Indonesian language that presents an even greater challenge in developing the Natural Language Processing (NLP), that powers the chatbot.
According to Irzan Raditya, co-founder and CEO of Kata.ai, an Indonesian B2B chatbot service provider that raised $3.5 million last year, more industry partnerships could be a solution to these challenges.
“We need more collaboration between the service providers, API providers, and more local developers studying AI,” says Raditya. “Without the human resource, it will be impossible to make this technology a reality.”
Launched in October 2016, Kata.ai actually evolved from a free text-based personal concierge service called YesBoss that recorded over 100,000 users at peak.
Before the startup’s pivot, the company struggled to keep up with customer demand and chose to move to a more sustainable business model by targeting a new segment – B2B.
ecommerceIQ speaks with Raditya to understand chatbots, his thoughts on its most promising applications and how his turbulent experience with YesBoss helped build Kata.ai to its present state.
Learning the ropes
Right from the start, the four founders of YesBoss were realistic about their venture.
“We understood that it wouldn’t be scalable (to provide a concierge service) without AI,” admits Raditya.
“And in order to build the algorithms, you need data and we collected tons of data from YesBoss.”
“We learned how to make people’s lives easier through conversations gleaned from our concierge service answering different kinds of customer requests, be it booking a plane ticket or shopping online. Along the way, we learned we wanted a business that was more impactful and scalable.”
With the man-power heavy B2C service provided by YesBoss no longer active, Raditya saw an emerging opportunity in the chatbot space in Indonesia.
Sitting on a bank of data, Kata.ai became the first chatbot provider in the local Indonesian language.
“By studying all the texts in Indonesian from YesBoss — the uniqueness of abbreviations, the slang, and complexity of certain phrases — we did the dirty work and spent over a year researching machine learning to build a comprehensive algorithm compatible with the needs of the Indonesian language NLP,” says Raditya.
Now equipped with a chatbot able to understand the local language, what was the team going to do with it?
Serving the enterprises
As a conversational AI platform targeted at enterprises, Kata.ai develops a chatbot for companies to easily handle incoming customer requests and facilitate ecommerce in Indonesia.
One of the brands that has developed a chatbot with the company is Unilever.
Using a female persona named Jemma, the chatbot on LINE acts as a virtual assistant that liaises with customers on behalf of Unilever where customers can chat about everyday things including entertainment news and/or ask for beauty recommendations.
Raditya says the chatbot is popular among female customers who like to ask for relationship and fashion tips.
“As of now, Jemma has befriended over 2 million users on LINE and recorded over 200 million conversations to date within a span of one year since its launch,” says Raditya. “The longest chat session actually lasted for four hours.”
Another chatbot that Kata.ai helped build is Veronica, the legendary brand persona of Indonesia’s biggest telecommunications provider, Telkomsel.
By texting with Veronica on LINE, Facebook Messenger, and Telegram, customers can access product information, Telkomsel’s latest promotions, a live customer agent, as well as facilitate transactions such as phone credit top ups, buy data packages, make bill payments and reserve appointments with the company’s nearest offline customer service center.
Envisioning a platform for all
If the company’s enterprise solution provides brands with tailored chatbots, Kata’s newest venture released last month, Kata Bot Platform, hopes to provide developers with a enterprise-grade framework to help them create chatbots and reduce costs on tech development and research.
“By releasing our platform to the public, we want to solve the ecosystem problem. A lot of Indonesian developers aspire to incorporate chatbots into their businesses but face the daunting task of building it from the scratch because there’s almost no platform that caters to the Indonesian language,” says Raditya. “Kata.ai provides the infrastructure so they can focus on building a good customer experience for the business.”
He also encourages all businesses to use the platform as it can accommodate up to one billion messages and isn’t restricted to only startups.
Do chatbots live up to the hype?
“We believe improving the technology of chatbots is important to capture an opportunity that exists in Indonesia’s strong chat culture and major shift in the interaction between people and technology.”
This shift, according to Raditya, will see people utilizing less apps as it impedes the customer experience; from installing the app, registering for the service, learning how to use it, constantly having to update to new versions, etc.
Chatbots, on the other hand, provide a more efficient way for users to interact with the service provider without having to familiarize themselves with a new interface as most Indonesians already know how to use popular messaging apps.
“Chat is the new standard of user interface.”
The CEO himself has a favorite AI-powered personal assistant service he uses to save time from shuffling through email chains based in Singapore called Evie.ai.
“Engaging and intelligent chatbots allow businesses to turn these channels from information centers to profit centers, as shown with the case of Telkomsel. They can now monetize an audience of over 10 million connected to their social channels by selling data packages — something that they were unable to offer before,” shares Raditya.
“If you take a look at consumer technology, changes are usually predicted in ten year cycles. The dotcom boom in 1997 changed the way people conducted business with websites. In 2007, Apple changed the landscape with the launch of the iPhone and app store,” explains Raditya. “During these periods, we saw companies coming out as winners carrying high valuation and delivering high impact to the economy.”
“Indonesia is always left behind.”
“With analysts predicting AI to become the one the driving consumer technology on 2017 onwards, Kata.ai can spearhead the wave of incoming local entrepreneurs by being the breeding ground for a new generation of botpreneurs,” says Raditya.
His “big picture” approach was sparked during the Microsoft Accelerator program in Bangalore last year, in which all founders participated. The program provided 14 B2B startups with Microsoft’s resources and network to help accelerate their growth and Kata.ai was a finalist out of 1,500 applicants.
“We learned to see things from right to left, which meant focusing on the goal first and working backwards to the process in order to achieve it,” says Raditya. “Another thing we learned is how to sustain innovation by being the Category Creator, Category Sustainer, and eventually the Category Destroyer.”
“The program also gave us experience with the technical side of things, such as how to scale our infrastructure effectively to serve millions of customers.”
Although the company’s focus is currently on Indonesia, Raditya isn’t counting out expansion to other countries.
“Right now, we’re focusing on building chatbot technology that can offer customers a next level of service that is personalized using historical data,” closes Raditya. “But who knows, in one or two years, I think voice could be an interesting medium as well.”