A2P Messaging Market Size, Share, Analysis & Forecast [2031]

Report Description

The global A2P messaging market size was valued at USD 69.06 Billion in 2022 and is likely to reach USD 96.74 Billion by 2031, expanding at a CAGR of 5% during the forecast period,2023–2031. The increasing demand for Application-to-Person (A2P) messaging solutions from e-commerce platforms is expected to drive the market.

E-commerce organizations are adopting A2P solutions to increase sales by sending personalized promotional messages to their large consumer base. Many businesses on these platforms are relying on messaging services to send discount codes, targeted promotions, and other incentives to encourage customers to make purchases. Based on the user’s browsing history, wish list, and purchasing behavior, organizations are using A2P messaging to increase customer engagement which is fueling the growth of the market.

• As per the study report in July 2021, by Mobilesquared, a global leader.

• in business messaging intelligence, around 1.3 million businesses started using A2P messaging in 2020. This addition has taken the total number of businesses using the channel closer to 8 million globally. This represents usage of A2P messaging increased by 20% compared to the pre-pandemic.

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The market report finds that the COVID-19 pandemic fueled the A2P messaging market, due to the expansion of promotional operations on mobile by e-commerce and other industries with the rising number of smartphone users. A2P messaging solutions assisted several enterprises in staying connected with their customers and raising sales during the pandemic.

The solution attained a pivotal part in government communication applications during COVID-19. It was used to convey information about the location of the coronavirus outbreak and information about the infection, which further increased their user base.

A2P Messaging Market Dynamics

Major Drivers

Growing number of mobile subscribers is expected to boost the A2P messaging market in the coming years. By increasing expenditure on A2P services, mobile network operators (MNOs) aim to increase their revenue. Organizations use this capability to send alerts, notifications, verification, and promotional messages to their customers. Additionally, due to the rapidly increasing number of smartphone subscribers, industries in several emerging countries are adopting A2P messaging solutions to improve their customer outreach, thereby further propelling the market.

• According to the study report in June 2023, rapid growth has been observed in the number of mobile subscriptions in the last few years. The number of mobile phone subscriptions increased to 8.6 billion in 2022, which was 8.4 billion in the previous year.

Existing Restraints

Strict government regulations and policies of A2P messaging are expected to hamper the market. Compliance with data protection and privacy laws such as the Telephone Consumer Protection Act in the US and the General Data Protection Regulation in Europe have strict rules and policies for A2P messaging. These rules impose limits on how organizations store, collect, and use customer data, which is likely to affect the market.

Emerging Opportunities

Rising adoption of A2P messaging by MNOs to increase customer engagement is expected to create lucrative opportunities for the market players. Globally, the customer base of the A2P messaging market is very large, this helps MNOs recover revenue in case of subscription loss.

MNOs have their own network connectivity solutions and direct operator agreements to merge new profitable in-house services via A2P messaging traffic, as it is among the largest contributors to SMS revenues. In addition, enterprises such as tourism, BFSI, and healthcare are adding complementary messaging services to keep customers updated.

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Scope of A2P Messaging Market Report

The market report includes an assessment of the market trends, market segments, and regional markets. Overview and dynamics have also been included in the report.

A2P Messaging Market Segment Insights

Component Segment Analysis

Based on component, the A2P messaging market is bifurcated into service and platform. The platform segment is expected to expand at a significant pace during the projection period, owing to the increasing adoption of cloud-based A2P messaging. Organizations are increasingly adopting cloud solutions, due to their flexibility, scalability, and cost-effectiveness. By adopting a cloud platform, businesses combine A2P messaging abilities into their existing infrastructure.

This helps companies ensure reliable global access and the capability to scale according to messaging volumes. In addition, an increasing trend is detected in omnichannel platforms, as several customers are involved with businesses over multiple channels such as chat apps, SMS, and social media. There is a need for integrated platforms to manage A2P messaging over communication channels.

The service segment is anticipated to hold a key share of the market in the coming years, as it ensures efficient and effective communication between individuals and applications. Organizations are looking for complete service packages that extend beyond simple message delivery. These additional services, such as message personalization, and chatbot integration, facilitate better customer engagement.

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Application Segment Analysis

On the basis of application, the global market is segregated into interactive services, pushed content services, customer relationship management (CRM) services, promotional campaigns, and others. The customer relationship management services segment is projected to register a considerable CAGR during the forecast period, as it increases customer service and support.

Businesses are using A2P messaging strategically in their CRM strategies to deliver personalized messages, including order updates, transactional notifications, and appointment reminders. This provides instant support, self-service options, and efficient solutions to customer inquiries. These factors are increasing the popularity of CRM among users, which is fueling the segment growth in the market.

Deployment Mode Segment Analysis

Based on deployment mode, the A2P messaging market is divided into cloud and on-premise. The cloud segment is expected to register a robust growth rate during the forecast period, owing to the high adoption of cloud-based A2P messaging platforms and services.

Cloud deployments in A2P messaging allow companies to harness the benefits of platform-as-a-service (PaaS) models and infrastructure-as-a-service (IaaS). It further reduces hardware investments and maintenance complexities which fuels the segment growth in the market.

The on-premise segment is projected to hold a considerable market share in the coming years, due to the strong demand for A2P messaging solutions in several industries. Various organizations including government institutions, financial service providers, and healthcare facilities prioritize to maintain their messaging infrastructure within their premises, to maintain constricted control over data privacy, and to effectively meet industry-specific regulations.

Organization Size Segment Analysis

In terms of organization size, the global market is segregated into small & medium enterprises and large enterprises. The large enterprises segment is expected to expand at a significant pace during the projection period, as it delivers tailored and contextually relevant messages to the customers.

By analyzing customer data and behavior, these enterprises create personalized messaging experiences that increase conversions, improve customer engagement, and increase brand loyalty. With the implementation of omnichannel messaging, enterprises are absorbing customers over multiple touchpoints and offering consistent messaging support.

Small & medium enterprises segment is anticipated to hold a key share of the market in the coming years, as it relies on A2P messaging to provide updates, promote products, and involve promotional activities. A2P messaging is anticipated to gain adoption among SMEs due to cost-effectiveness and efficient communication capabilities. This technology offers SMEs an effective way to reach several potential customers, to increase their customer base.

SMS Traffic Segment Analysis

Based on SMS traffic, the A2P messaging market is divided into cross-border and national. The national segment is projected to register a considerable CAGR during the forecast period, owing to rising emphasis on real-time communication and operational efficiency in the aviation industry. National air traffic authorities and service providers are using A2P messaging to streamline interactions with airlines, ground staff, pilots, and other participants.

This increasing trend is driven by the need to improve flight safety, increase the proficiency of air traffic management, and guarantee seamless coordination between various entities within the national airspace.

The cross-border segment is anticipated to account for a significant market share in the coming years, owing to increasing international business and global connectivity. Businesses are increasing their operations across borders, and cross-border messaging, as it offers an efficient and reliable means of communication with partners, customers, and suppliers in several countries. This increasing trend is driven by the need to establish global reach, improve customer interaction, and enable continuous international transactions.

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Vertical Segment Analysis

On the basis of vertical, the global market is segmented into healthcare, BFSI, retail & e-commerce, media & entertainment, travel & tourism, and others. The e-commerce segment is expected to register a robust growth rate during the forecast period, owing to the increasing implementation of online A2P messaging to drive customer engagement.

The expansion of the e-commerce industry in various parts of the world along with growing smartphone subscriptions is fueling the use of A2P messaging. These solutions can be used to attract users with lucrative offers, promotional codes, and other benefits.

The media & entertainment segment is projected to hold a large market share in the coming years, due to the growing focus on increasing OTT subscriptions and ticket sales through A2P messaging. Media and entertainment companies are using A2P messaging to provide event notifications, promotional offers, personalized content updates, and various interactive experiences to their audiences. By integrating features such as video links, and rich media messaging, businesses make immersive and engaging experiences that drive audience meetings and loyalty, which is propelling the growth of the segment in the market.

Regional Analysis

In terms of region, the global A2P messaging market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is expected to dominate the market during the projection period, owing to the increasing internet connectivity, rising use of mobile subscribers, and growing population. These factors are fueling competition among enterprises in the region. A2P messaging allows companies to focus on better communication with their customers, thereby increasing retention, which is fostering the growth of the market in the region.

• On March 10, 2023, a press release by the GSM Association states that around 5.4 billion people worldwide, subscribed to mobile services, among which 4.4 billion use mobile internet. In 2022 around 5% of GDP was generated by mobile technologies and services.

The market in North America is anticipated to expand at a rapid pace in the coming years, due to the increasing number of internet subscribers, developing preferences for digital advertisements, and adoption of advanced technologies. Rapidly increasing startups and SMEs are implementing A2P messaging to build awareness and manage customer base. The US is executing the 10-digit long code (10DLC) channel, where customers send messages in a huge volume that range in the form of long codes and short codes and are toll-free. As it is a low-cost method of sending messages on huge scales, the A2P messaging system is gaining popularity in the region, further boosting the market.

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