Chatbot Market Outlook 2031:
The global chatbot market size was valued at USD 670.80 Million in 2022 and is expected to reach USD 4.96 Billion by 2031, expanding at a CAGR of 24.9% during the forecast period, 2023 and 2031. The growth of the market is attributed to the increased use of customer service activities by businesses to decrease operational expenses.
A chatbot is a computer software that replicates and processes human communication (written or spoken), allowing people to connect with digital gadgets as if they were conversing with actual people. Chatbots may be as simple as one-line programs that respond to a simple question, or as sophisticated as digital assistants that learn and grow as they gather and analyze data to offer increasing degrees of customization.
Chatbots process data to respond to a variety of queries, using AI, automated rules, natural-language processing (NLP), and machine learning (ML). Task-oriented (declarative) chatbots and data-driven and predictive (conversational) chatbots are the two major types of chatbots. Task-oriented (declarative) chatbots are one-purpose systems that execute a specific task.
They create automated yet conversational replies to user questions using rules, NLP, and very little machine learning. Common enquiries, such as inquiries about company hours or simple transactions with few variables, can be handled by task-oriented chatbots. Though they employ natural language processing (NLP) to let end users to interact with them in a conversational manner, their capabilities are quite limited.
These are the most popular chatbots right now. Virtual assistants or digital assistants are data-driven and predictive (conversational) chatbots that are far more intelligent, interactive, and customized than task-oriented chatbots. They utilize analytics and predictive intelligence to provide personalisation based on user profiles and previous activity.
Over time, digital assistants can learn a user's preferences, provide recommendations, and even predict requirements. They can start discussions in addition to monitoring data and intent. Consumer-oriented, data-driven, predictive chatbots include Apple's Siri and Amazon's Alexa.
Businesses benefit from chatbots because they increase operational efficiency and save costs while providing convenience and additional services to internal workers and external consumers. They enable businesses to quickly address a variety of consumer concerns and questions while eliminating the requirement for human engagement.
A firm can grow, customize, and be proactive all at the same time using chatbots, which is a key difference. Chatbots enable companies to interact with an endless number of consumers in a personalized manner, and they can be scaled up or down based on demand and business needs. A company may deliver humanlike, customized, proactive service to millions of individuals at the same time by employing chatbots.
Businesses, employees, and consumers are likely to benefit from enhanced chatbot features such as faster recommendations and predictions, as well as easy access to high-definition video conferencing from within a conversation, in the near future, when AI is combined with the development of 5G technology.
These and other possibilities are still being investigated, but as internet connectivity, AI, NLP, and machine learning develop, they will become more prevalent. Every person will eventually have a fully capable personal assistant in their pocket, making our world more efficient and connected to live and work in.
Chatbot Market Trends, Drivers, Restraints, and Opportunities
- Increasing consumer demand for quick consumer service is key factor boosting the market growth during the forecast period.
- Technological advancements in artificial intelligence (AI) and increasing number of retail and e-commerce around the world are projected to drive the market growth during the forecast period.
- Increase in the use of messaging services, which is likely to surpass the number of users on social networking sites is expected to push the market growth.
- During the Covid-19 pandemic, various companies employed chatbots to answer and manage the burden of customer queries this is anticipated to fuel the market growth in the coming years.
- Significant communication gaps and security breaches presents as key challenges that can hamper the market growth during the forecast period.
- Increased focus on R&D for development of self-learning chatbots and technological advancements are estimated to offer lucrative opportunities for the market players.
Scope of Chatbot Market Report
The report on the global chatbot market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
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Attributes
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Details
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Report Title
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Chatbot Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
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Base Year
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2022
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Historic Data
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2016–2021
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Forecast Period
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2023–2031
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Segmentation
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Type (Standalone, Web-based, and Messenger-based/Third party), Product Landscape (Artificial intelligence, Marketing, and Human intelligence), End-users (Small Enterprises, Medium Enterprises, and Large Enterprises), Applications (Bots for Service, Bots for Social Media, Bots for Payments/ Order processing, Bots for Marketing, and Others), Vertical (Healthcare, Retail, Banking, Financial Services, and Insurance, Media and entertainment, Travel & Tourism, E-commerce, and Others)
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Regional Scope
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Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
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Report Coverage
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Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
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Key Players Covered in the Report
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[24]7.ai, Inc.; Acuvate; Aivo; Artificial Solutions; Botsify Inc.; Creative Virtual Ltd.; eGain Corporation; IBM Corporation; Inbenta Technologies Inc.; Next IT Corp.; Nuance Communications, Inc.
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Chatbot Market Segment Insights
Type Segment Analysis
Based on type, the chatbot market is segmented into standalone, web-based, and messenger-based/third party. The standalone segment is expected to account for a key share of the market during the forecast period due to increased use of Visual assistant apps like Google Assistant, Amazon's Alexa, and Apple's Siri by consumers. The demand for standalone chatbots is anticipated to increase as a result of this.
In order to improve client engagements, many businesses prefer chatbots for messaging platforms and customer support bots for web-based services. Chatbots allow businesses to communicate directly with consumers and collect data on their preferences, which can then be utilized in digital marketing campaigns. Chatbots are also being used by businesses in the retail, digital marketing, healthcare, and other industries to improve customer service.
Product Landscape Segment Analysis
Based on product landscape, the chatbot market is segmented into artificial intelligence, marketing, and human intelligence. The marketing segment is expected to hold a key share of the market during the forecast period as chatbots allow for direct consumer engagement, they are widely employed in digital marketing to keep current customers informed about products and services.
On the other hand, the artificial intelligence segment is anticipated to expand at a rapid pace during the forecast period owing to extensive investment by market players in the artificial chatbots market. Artificial intelligence is used by chatbots to process language and communicate with humans. Many of the bots are for message apps such as Facebook Messenger, Skype, Slack, and other social media networking sites.
Payment gateways may be directly integrated with the assistant, allowing developers to leverage these chat platforms for payment services. One of the key potentials in the market is to collect nominal fees as commission.
End-Users Segment Analysis
Based on end-users, the chatbot market is segmented into small enterprises, medium enterprises, and large enterprises. The large enterprises segment is expected to constitute a key share of the market during the forecast period owing to its increased adoption in large enterprises. Various large enterprises build chatbots according to a set of rules; but, in the future, large enterprises are anticipated to optimize their chatbots in order to accomplish more complex operations.
The majority of chatbot creation tools use a machine learning approach, which allows businesses to create an AI application interface that delivers meaningful business data. Furthermore, advances in artificial intelligence in the industry have resulted in a significant shift in usage from online social networks to mobile-based messaging apps.
Applications Segment Analysis
Based on application, the chatbot market is segmented into bots for service, bots for social media, bots for payments/ order processing, bots for marketing, and others. The bot for service segment is expected to represent a key share of the market during the forecast period owing to its increased adoption as a result of cost reduction.
On the other hand, the bots for marketing and bots for payments/ order processing segment is anticipated to expand at a rapid pace during the forecast period. This has been an age of automation, with many firms preferring to automate regular and monotonous operations in order to save money. Businesses are focusing their automation efforts on sales and customer support, which will result in significant cost savings if chatbots are used.
Artificial intelligence-enabled chatbots are becoming increasingly popular. Chatbots in the workplace will dramatically reduce labor expenses by automating a portion of customer support and sales, resulting in significant cost savings for enterprises. Instead of waiting days for a response, they expect rapid replies from customer care. By using a chatbot to respond, the chances of losing a customer are greatly decreased. E-commerce companies can employ these bots for returns and Exchange.
Verticle Segment Analysis
Based on vertical, the chatbot market is segmented into healthcare, retail, banking, financial services, and insurance, media and entertainment, travel & tourism, e-commerce, and others. The e-commerce segment is expected to constitute a key share of the market during the forecast period due to advantages such as distant connectivity and virtual presence, which decrease transportation costs significantly.
Customers like to obtain information about real-time pricing changes regarding brands while purchasing in the e-commerce industry. These businesses are increasingly using chatbots to engage their customers and cut down on total shopping time. It helps e-commerce businesses to increase their ROI by lowering their operating costs.
On the other hand, the banking and financial services segment is anticipated to expand at a rapid pace during the forecast period owing to increased cross-selling activity and lower customer support expenses. For the financial business, the chatbot developed must be safe and provide a pleasant user experience. Artificial intelligence advancements, as well as a dramatic growth in the number of messaging apps, are propelling the chatbot industry in the BFSI sector.
Regional Analysis
On the basis of regions, the chatbot market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is anticipated to dominate the market during the forecast period. The regional market growth can be attributed to it being the central hub of startups in the Chatbot industry, and the most of chatbot implementations originated in this region.
On the other hand, Asia Pacific is expected to exhibit a rapid growth rate in the coming years due to it being the major hub for service industry. Chatbots are rapidly being used in everyday customer support operations by several big companies. Chatbots' considerable development potential in many areas can be attributed to the major benefits that they provide to businesses, such as lower operating costs, greater customer experience, and increased operational efficiency.
Segments
The global chatbot market has been segmented on the basis of
Type
- Standalone
- Web-based
- Messenger-based/Third party
Product Landscape
- Artificial intelligence
- Marketing
- Human intelligence
End-users
- Small Enterprises
- Medium Enterprises
- Large Enterprises
Applications
- Bots for Service
- Bots for Social Media
- Bots for Payments/ Order processing
- Bots for Marketing
- Others
Vertical
- Healthcare
- Retail
- Banking, Financial Services, and Insurance (BFSI)
- Media and entertainment
- Travel & Tourism
- E-commerce
- Others
Regions
- Asia Pacific
- North America
- Latin America
- Europe
- Middle East & Africa
Key Players
- [24]7.ai, Inc.
- Acuvate
- Aivo
- Artificial Solutions
- Botsify Inc.
- Creative Virtual Ltd.
- eGain Corporation
- IBM Corporation
- Inbenta Technologies Inc.
- Next IT Corp.
- Nuance Communications, Inc.
Competitive Landscape
Key players competing in the chatbot market includes [24]7.ai, Inc.; Acuvate; Aivo; Artificial Solutions; Botsify Inc.; Creative Virtual Ltd.; eGain Corporation; IBM Corporation; Inbenta Technologies Inc.; Next IT Corp.; Nuance Communications, Inc.
The market's several competitors are encouraged to develop ground-breaking products that address evolving technology, corporate processes, consumer assistance, and security requirements. The contemporary market climate is characterized by fierce rivalry among the major competitors for market dominance.Some of the key business strategies employed by companies in the market includes mergers, acquisitions, partnerships, collaborations, capacity expansion, and product launches to increase their market shares. For example
- In September 2019, YES Bank, an Indian private sector bank, launched YES ROBOT, an artificial intelligence-enabled chatbot, to assist its clients. YES ROBOT, created by Microsoft, allows clients to do financial and non-financial banking transactions utilizing conversational AI with significant financial expertise.
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