By Matt Conger, CEO of Cadence

“Chatbot” should be a candidate for word of the year. Western businesses are already preparing their customer service protocols (at least I hope they are), but it’s China and the Chinese consumers that are responsible for the rise of this technology.

Chatbots are the new iteration of “dial 1 for customer support, dial 2 for technical support, dial 3 for billing….”. While the traditional automated customer support systems typically frustrate customers, chatbots are generally embraced when deployed on popular platforms like Baidu. Customers like chatbots because they permit fast access to company and product information, and they also like their whimsical names like dumi and xiaobing. Companies benefit from using chatbots because of the reduced costs: the costs for deploying and maintaining chatbots are trivial compared to traditional customer service call centers.

The technology needed to build and deploy chatbots is relatively simple. The language processing technology utilized by chatbots already receives millions of new data points daily through Siri and other “smart” assistant programs. By using this technology, chatbots are able to learn and recognize patterns. For example, through pattern recognition, chatbots can detect whether a customer’s intent is to order a product or inquire about it. Chatbot designers can also implement “offramps,” where the chatbot goes away during a conversation to be replaced by a human.

Big platforms, such as Facebook Messenger and Apple’s iMessage, are opening up their ecosystems to this technology, but they are not the first to do so. WeChat has been doing this for over a year. Using WeChat, it is relatively simple to program natural-sounding auto-responses based on user actions.

Differences between Chinese and American consumers have spurred the earlier adoption of chatbots in China. Chinese customers talk a lot before they make purchasing decisions. Not only is this true for ‘“happy” things like buying good and services but also “annoying” things like dealing with bureaucracy” said Andrew Schorr, CEO of Beijing-based Grata. Americans are different. “As an American, my approach is to contact customer service only as a last resort,” he continued. As a result, Chinese consumers are more comfortable with chatbots than Americans.

Furthermore, the ubiquitousness of WeChat (with its service accounts for brands and retailers) and Taobao/Tmall (with one-click-to-chat features for merchants) have spurred two trends. First, when consumers in China want to summon a service agent, they prefer to tap or click, rather than make a phone call. Second, Chinese merchants and businesses have built massive customer service histories, which are all written and easily stored.

Since western companies are late to the chatbot game, they have yet to build up the same amount of data from their service interactions with customers.Simply put, this means that Chinese merchants can deploy smarter, more responsive bots than those in the west.

The west is beginning to embrace the technology, however, as Facebook and Apple have opened up their systems to messenger bots. “The bot frenzy launched by Facebook at their F8 developer conference earlier this year hasn’t disappeared. After a quick reality check, there are now several serious players and investments in the chatbot space” Mr. Schorr said.

The biggest beneficiaries of this innovation will be the companies whose culture can handle a migration from a chat-heavy, human-powered solution to a chat-heavy, AI-powered solution.

To remain competitive companies whose culture is rooted in a phone-centric, human-powered view of customer service will have to evolve. The good news is that they can leapfrog the neither-here-nor-there solutions (I’m looking at you, airline companies) of the past five years and move straight to building and deploying chatbots.

Chatbots provide many benefits to companies operating or serving customers in different timezones. Before, customers in other countries may have problems contacting the company during business hours. As a customer, this is relatively frustrating. As a business owner, this is even more frustrating.

To address the problem, companies can utilize chatbots. Even better, there are intermediate tools companies can implement to adopt the technology, such as Intercom.

I welcome the rise of our chatbot overlords. If people say “take me to your leader,” I hope people will recognize China’s role in the growth of this great technology.


About the Author: Matt Conger is the CEO of Cadence (, a matchmaking platform to hire interpreters. He was formerly a venture capitalist at Hudson Clean Energy Partners and, prior to that, worked at Bain & Company. He has lived in Beijing the past three years.

Posted by Matt Conger