Posttoday conference issues wake-up call to SMEs on embracing AI

With their agility and potential for scalability, SMEs hold great promise for contributing to the country's development. However, they also face unique challenges that require careful attention and support.

To educate entrepreneurs on the arrival of artificial intelligence (AI) and how to employ the technology to improve their businesses, Posttoday organised a conference, "Posttoday Smart SME: Embracing the AI Era to Shake Up the World”, on Monday at the Grand Hyatt Erawan Bangkok Hotel.

Not just ChatGPT

"When the world keeps spinning around, we need to keep up with the world’s mega-trends and adjust ourselves. AI encompasses a wide range of technologies and applications that can benefit SMEs in various ways; AI is not just ChatGPT alone," said Somchai Meesen, Vice Chairman of Nation Group (Thailand) Plc.

In his speech at the opening ceremony, Somchai highlighted four mega-trends that SMEs should monitor: geopolitics, climate change, AI-driven transformation, and soft power through influencers.

"Understanding and adapting to the geopolitical landscape is crucial for SMEs to thrive amidst political dynamics. By staying informed and proactive, SMEs can overcome challenges and capitalise on opportunities," Somchai said.

"By embracing carbon credits and taking steps to reduce their carbon footprint, SMEs can contribute to a greener future while demonstrating their commitment to sustainability."

He also explained that the advent of AI is reshaping the world. Some tasks previously performed by humans could now be automated through AI. It is essential for SMEs to identify areas where AI can enhance convenience and productivity, allowing employees to focus on higher-value tasks that require human creativity and problem-solving.

Lastly, Somchai dwelt on the soft power of influencers like Thai rapper Lisa from Blackpink, who wears traditional Thai clothing and has the ability to create global trends. SMEs can strengthen their market presence and gain a competitive edge, he said.

Integrating AI in business

Before session one of the seminar, Keerati Rushchano, permanent secretary at the Ministry of Commerce, delivered a special keynote address on "Building Confidence for Thai SMEs in the Global Market”.

"While technology has advanced significantly with AI, robotics, and chatbots, there are still certain aspects where technology cannot outperform humans due to the intricacies of human intelligence. However, the integration of AI in business operations has greatly improved convenience, especially for SME entrepreneurs," said Keerati.

According to Keerati, SMEs in Thailand have significantly contributed to the country's economy, particularly in the tourism sector, generating over 6 trillion baht in revenue in 2021. Thailand has around 3.13 million micro-, small-, and medium-sized enterprises (MSMEs), 80% of them operating in the service and tourism industries. Additionally, Thai SMEs account for 10% of the total export value, amounting to 1 trillion baht.

He explained that the Ministry of Commerce had been instrumental in assisting SMEs from start to finish, including business registration services and facilitating the adoption of digital systems to enhance convenience. As international travellers are expected to return, preparations are underway to cater to their needs effectively.

The first session, "How to be a smart SME”, was conducted by Veerachai Amorntakolsuwech, senior executive vice president, business and public sectors customer group, Government Savings Bank (GSB); Mogul Posayapisith, the deputy managing director who is in charge of Strategic Group Business Development and Entrepreneurship at SME Development Bank of Thailand; Navachai Kiartkorkuaa, Head of Enterprise Marketing and SME Business Management Section at AIS; and Benchawan Ongsri, Senior Director, Mall at Lotus Thailand.

Focus on profit margin

Veerachai emphasised the challenge of relying solely on sales figures when seeking loans from banks, as it can lead to low profit margins and difficulties in securing favourable loan terms. Banks assess a company's financial health and stability before approving loans, considering factors such as profitability. While strong sales indicate demand, sustainable profit margins are crucial in demonstrating the ability to generate earnings and cover loan repayments.

Therefore, businesses should focus on improving profit margins through cost optimisation and operational efficiency, emphasising both sales and profitability. This will enhance their chances of obtaining loans with favourable terms and ensure long-term financial stability.

"In recent times, we have witnessed the emergence of social media platforms that offer loans to individuals. This represents a notable shift in the financial landscape, as these platforms leverage user data and digital connectivity to provide convenient and accessible financing options," said Veerachai.

Mogul agreed with Veerachai about the importance of diversifying capital sources for SMEs, as relying solely on banks could restrict funding options.

To overcome this limitation, Mogul suggested that they explore alternative avenues, including investors, venture capital firms, crowdfunding platforms, and even social media lending platforms.

Mogul also emphasised three key elements that SMEs should prioritise:

▪︎ Cultivating a growth mindset is crucial. 

SME owners and entrepreneurs should foster an open, innovative mindset that embraces change and calculated risks. This mindset allows SMEs to identify new opportunities and continuously adapt to market dynamics.

▪︎ Developing relevant skill sets, especially future-oriented skills, is essential. 

SMEs must stay updated with industry trends, invest in employee training, and embrace emerging technologies to remain competitive in evolving industries.

▪︎ Maintain strong financial discipline, encompassing effective financial management practices such as budgeting, cash flow management, and financial planning, is critical. By practising financial discipline, SMEs can optimise resource allocation, maximise profitability, and ensure long-term sustainability.

Benchawan said on behalf of Lotus: "We have a role in assisting tenants at Lotus’s rental spaces by offering knowledge and assistance in various aspects, such as:

▪︎ Market insights: Providing accurate market information to help tenants understand market trends and customer demands. This enables them to plan their business strategies more effectively.

▪︎ Distribution channels: Assisting tenants in developing and managing suitable distribution channels. This could include setting up online stores or arranging product displays in appropriate locations.

▪︎ Funding sources: Lotus has numerous partners that can help tenants access financial resources for their businesses.

▪︎ Business model development: Offering guidance and support in developing and improving tenants' business models

"By providing these services, Lotus aims to assist tenants in maximising their potential and achieving success in Lotus' rental spaces," said Benchawan.

Navachai highlighted that the term "generative AI" was not commonly used in 2020, and the emergence of technologies like ChatGPT has occurred relatively recently through advancements in machine learning.

Need for caution

While AI presents new opportunities, Navachai emphasised the need for caution and awareness in its utilisation. "It is crucial to understand the implications and risks associated with AI adoption,” said Navachai.

He emphasised the importance of selecting AI service providers who prioritise customer privacy and confidentiality to prevent any potential leaks or compromises of company information.

"Businesses can harness the benefits of AI while ensuring the security and protection of sensitive data," he said.

The second session was about "SME showcase”, delivered by Prachchanat Nithivasin, managing director of Mind Multiply Co Ltd and MEWE Systems, and Kawin Nitasanajarukul, founder of Otteri Wash & Dry and Kenex Corporation Co Ltd.

Prachchanat presented her service product, which focuses on training and developing organisations as well as sales team empowerment. She helps companies establish sales team monitoring systems and generates informative data for analysis, including feedback from marketing campaigns.

Digital transformation

She emphasised that 38% of SMEs are reluctant to switch to digital transformation in their work processes. She highlighted the importance of starting with people's transformation in order to reach that point successfully.

"Only entering the e-commerce sector does not constitute digital transformation. Similarly, storing data in Excel sheets alone does not qualify as being data-driven."

Prachchanat emphasised the significance of true digital transformation, which encompasses a comprehensive shift in processes, technology, and mindset to enable organisations to leverage the full potential of digital solutions.

Kawin showcased his wash and dry service, targeting the healthy lifestyle community. He aims to provide laundry services that are as accessible as clean drinking water.

"Ottori does not sell laundry services; we sell time and convenience. Thai people tend to be lazy when it comes to exercising or doing household chores. Ottori aims to meet the demand for a clean home while minimising effort for our customers," said Kawin.

"We were growing tremendously in the midst of the Covid-19 pandemic, as everyone desired to wear clean clothes."

Currently, there are 1,000 branches nationwide. Within seven years, the goal is to use Malaysia as a benchmark, where approximately 10% of people utilise convenience laundry services. In contrast, in Thailand, only 2% of the population does so. There is significant growth potential, he said