How Gupshup is riding the chatbot wave in India

Credit Wise Capital used to take two days to approve requests for two-wheeler loans and 10 days to provide the related funds to customers. The technology-driven lender now approves such loans in a couple of minutes and makes the money available in 20 minutes.

The turnaround was powered by the non-banking finance company’s decision to turn its operations totally digital using a chatbot.

It is not the only one.

India’s first property tech and real estate unicorn NoBroker also saw a rise in the number of listings once it automated the option using an AI-powered conversation platform on WhatsApp.

Like many emerging businesses in Asia’s third-largest economy, they tied up with Gupshup, a cloud messaging and conversational experiences platform in a bid to cater better to their smartphone-wielding customers.

The internet boom in the 1990s made US businesses realise the need to have a digital presence and invest in setting up websites. However, emerging markets like India did not follow the same trend and leapfrogged directly to smartphones, said Beerud Sheth, the chief executive and founder of Gupshup.

“Everybody is on WhatsApp, as businesses here realise the need to have a digital presence, they are preferring to have conversational bots inside these apps instead of websites,” Sheth told DH.

The pandemic drove more customers online, giving a significant boost to the role played by AI-driven chatbots and messaging platforms, industry observers said.

“The call centres had a tough time during (the) lockdown but had to continue (the) WFH (work-from-home) model in the absence of any other viable option,” Unicorn India Ventures Managing Partner Anil Joshi said. “Conversational solutions helped companies in better engagement with customers, which led to (an) increase in sales.”

Others found such platforms to have grown beyond merely conversational or chatbot messaging.

“Instead, these companies have created tech stacks that vastly improve the productivity, efficiency, and accuracy of the efforts put in by customer service and sales teams,” said Anirudh A Damani, the founder of Artha India Ventures, a Mumbai-based early-stage focused fund house which is also an investor in Gupshup’s competitor Exotel.

In chatbots we trust

The global conversational AI market size was valued at $6.18 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 23.6% from 2022 to 2030, according to Grand View Research.

Gupshup’s Sheth sees many micro, small and medium-sized companies (MSMEs) resorting to chatbots in the years to come for having a digital presence in India, which is the largest market for the company that achieved a billion-dollar valuation in April 2021.

Others agreed.

“A fastly digitising corporate India that cannot afford the archaic infrastructure and understands the importance of innovative and stable technology is an enormous opportunity for Gupshup,” said Damani.

With the Covid-19 pandemic, India saw scores of businesses move online to get orders. The rising availability of affordable internet and robust digital payment infrastructure in UPI boosted online payments further in India, which accounts for about 15 million WhatsApp Business users out of the total 50 million.

Gupshup counts established names such as HDFC Bank and about 80% of India’s unicorns ranging from PharmEasy to Byju’s as its clients. The company, which has about 50,000 clients across the globe, wishes to go public in the next few months as the “window opens”.

A few years from now, Gupshup expects every kirana store, pharmacy, and retail outlet to have a chatbot or a conversational experience on WhatsApp.

“This is the new web in the emerging markets, think of the chatbot as the new website and think of the messaging app as the new browser,” Sheth said, adding that Gupshup wants to enable the digitisation and automation transition with its tools.

Challenges

AI-driven chatbots have also helped companies in cutting their costs significantly in the post-Covid era as many firms tightened their teams to stay afloat.

“Think of bank branches; you could reduce their number,” since most of the services could be delivered using messaging platform tools, said Sheth.

Besides cost savings, the companies could even provide “a delightful customer experience” in a country that is price-sensitive, he added.

Chatbot platforms have to get better at handling all kinds of queries, experts pointed out. “Chatbots will have to become adept at addressing unstructured queries. Currently, it seems the majority of the applications of chatbots service structured queries (e.g., self-help queries of customers) before the exchange is handed over to a human agent,” said Professor Swanand Deodhar, Assistant Professor, Information Systems Area, IIM Ahmedabad.

Not only does this create a break in the customers’ experience, but the burden of structuring the query falls on the customer, Deodhar added.

Others agreed.

“Their biggest threat continues to be low margins in a low ARPU (average revenue per user) market like India, whereas the western and eastern markets offer much higher ARPUs,” said Damani.

There are other issues to tackle too.

“AI will keep it (Gupshup) busy for a few years and there are a lot of hard problems to solve, for instance providing chatbot services in vernacular languages,” said Sheth.