Chatbot Market Forecasts to 2028 – Global Analysis By Component (Solutions and Services), By Deployment (On-Premise and Cloud-based), By Type (AI Based and Rule Based), By Usage (Websites, Social Media, Mobile Applications and Contact Centers), By Organization Size (Small and Medium sized Enterprises (SMEs) and Large Enterprises), By Application (Personal Assistant, Branding Advertisement, Customer Services and Other End Users) and Geography
According to Stratistics MRC, the Global Chatbot Market is accounted for $4.28 billion in 2022 and is expected to reach $13.77 billion by 2028 growing at a CAGR of 21.5% during the forecast period. A chatbot is a type of interactive application that is created using a set of rules or artificial intelligence technology. It is intended to interact with humans via textual conversation and is integrated with various messaging services, thereby assisting users in a variety of industries. Various advancements in artificial intelligence and machine learning technologies are expected to improve the capabilities of chatbots. The market has expanded significantly in recent years. The increased need for providing 24x7 customer service and lowering operational costs by offloading jobs to chatbots, as well as the rise in consumer demand for self-service operations, has resulted in an increase in product demand.
According to the statistics provided by Hootsuite, WhatsApp has 2,000 million active monthly users, followed by WeChat with 1,263 million monthly active users, and Facebook Messenger with 998 million monthly active users as of January 2022. The market is being driven primarily by the increasing dominance of messenger applications and the growing demand for customer analytics.
Increased awareness & advantages of chatbots
The market is growing due to increased awareness of chatbots and their benefits, such as 24/7 availability of services, increased response capacity, increased return on investment (ROI) for customer support, and streamlined processes for repetitive inquiries. Furthermore, the use of chatbots provides significant benefits in the BFSI sector, such as increased net promoter score (NPS), increased customer satisfaction by reducing response times, and increased customer convenience in terms of product offerings, thereby fueling the growth of the market.
Lack of awareness
Lack of awareness is associated with management change may have an impact on market growth to some extent. Though the adoption of chatbot solutions is growing across industries, challenges related to effective usage and a lack of awareness about the benefits provided by AI-powered chatbot solutions may limit chatbot solution adoption in developing regions such as Latin America and Africa. Furthermore, while large organisations are at the forefront of adopting chatbot solutions, Small and Medium-sized Enterprises (SMEs) have limited adoption due to the cost of maintenance and a lack of skilled resources. However, with increased awareness of chatbot solutions, SMEs are expected to increase their use of chatbot solutions in the coming years.
Surge in Penetration of Chatbots in E-commerce
E-commerce chatbots are artificial intelligence systems that online retailers can use to interact with their customers throughout the customer journey. Chatbots provide customers with personalised shopping experiences based on previous interactions, shopping, website browsing history, age, and gender. They aid in the provision of timely notifications and proactive information to make customers aware of newly launched products, offers, and price changes in order to increase the revenue of e-commerce businesses. The e-commerce industry necessitates 24-hour customer service, which is not always possible with human assistance. This is driving the adoption of chatbots in the e-commerce sector, which is contributing to market growth.
Dearth of accuracy in user’s voice authentication
Two distinct approaches have emerged as a result of the evolution of voice-based authentication. The first authentication method involves having individuals repeat the same sentence multiple times in order to create a very general template comprised of a wide range of voiceprints. When users speak in the future, the newly generated voice prints can be compared to their old voice prints to authenticate them. The disadvantage of this approach is that voiceprints are more generic and, as a result, cannot be authenticated with the same level of accuracy as voiceprints generated with a single pass. The second method is to create a voiceprint from a single phrase or word and save it for each individual voiceprint. However, using this method, third parties can record authentication attempts and replay them to gain access.
During the outbreak of the COVID-19 pandemic, the global chatbot market is expected to have an increase in growth rate, owing to its deployment by various industries such as banking and insurance, healthcare, and retail for responding to customer queries and other tasks. Due to lockdown conditions in the majority of countries, various organisations have adopted remote work facilities. Due to employees' limited availability, businesses rely heavily on chatbots to manage the burden of customer inquiries. During the COVID-19 chaotic situation, however, certain companies operating in the chatbot market, such as Google and IBM, have come forward with their strategic steps to help society. For instance, in June 2020, the Andhra Pradesh National Health Mission announced that they had integrated with IBM Watson, a virtual agent, to help people easily get answers to their COVID-19 queries. The innovative chatbot is designed to understand and respond to common pandemic questions in Telugu, Hindi, and English. These critical factors may generate investment opportunities for the chatbot industry on a global scale.
The Large Enterprise segment is expected to be the largest during the forecast period
Because of the widespread use of chatbots in the businesses, the large enterprises segment is expected to be the largest during the forecast period. However, large enterprises are expected to optimise their chatbots in the future in order to achieve sophisticated operations. The majority of chatbot development tools are based on the machine learning model, allowing businesses to create an AI applications interface to deliver actionable business data. Chatbots allow businesses to directly interact with customers and collect data on customer preferences, which can then be used in digital marketing activities. These initiatives were implemented in order to convert more customers and expand the company's customer base.
The Healthcare segment is expected to have the highest CAGR during the forecast period
Healthcare is expected to grow at a significant CAGR during the forecast period. This is due to the increasing use of bot services in the healthcare and medical sectors. In the healthcare industry, these online services assist in delivering health-related information to users, scheduling appointments with doctors and surgeons, and providing patients with a diagnosis (opinion). The focus of key companies on developing advanced, customised conversation bots for the healthcare industry is driving market growth.
Region with largest share:
Due to the increased penetration of mobile and web-based chatbots across multiple platforms in the region, North America is expected to hold the largest share of the chatbot market during the forecast period. Increased adoption of chatbot technologies for effective customer engagement and improved customer service is also expected to drive future market demand for chatbots in North America. Because of the increased adoption of mobile applications and the lucrative presence of start-up vendors in the country, the United States is expected to see significant growth in the chatbot market, fueling market growth in this region.
Region with highest CAGR:
The Asia Pacific region is expected to grow at the fastest CAGR during the forecast period, owing to rapidly expanding retail and e-commerce businesses in emerging economies like China, India, Indonesia, Vietnam, Malaysia, the Philippines, Taiwan, and Thailand, which has accelerated the high demand for and widespread adoption of chatbots by retailers and e-commerce business owners. With rapidly expanding information and communications technology infrastructures in leading economies such as China and India, the market in the region is expected to expand further.
Key players in the market
Some of the key players profiled in the Chatbot Market include IBM Corporation, Egain Corporation, NEXT IT Corp., Creative Virtual Pvt. Ltd., CX Company, 24/7 Customer Inc., Speaktoit Inc., Codebaby (Idavatars) Inc., Howdy, DigitalGenius, Semantic Machines, Amazon Web Services, Inc., Inbenta Holdings Inc., Google LLC, Microsoft Corporation, WeChat, Artificial Solutions and Naunce Communications Inc.
In September 2022, eGain Corporation, the leading knowledge automation platform provider for customer engagement, declared the availability of a pre-built connector for IBM Watson Assistant. The connector leverages eGain's unique BYOB architecture, enabling business users to easily plug the Watson Assistant into the eGain platform without coding.
In January 2021, Nuance launched the Omnichannel Patient Engagement Virtual Assistant Platform to power healthcare's 'Digital Front Door.' Nuance's omnichannel patient engagement platform represents a new integrated philosophy for enabling healthcare's digital front door and a well-thought-out, well-implemented, and highly-practical solution for delivering an enhanced level of digital services to patients.
In September 2020, Google launched a new Dialogflow Customer Experience in Beta. The new Dialogflow Customer Experience (CX) platform is aimed at building artificial intelligence agents for enterprise-level projects at a larger and more complex scale than the standard variety.
• Social Media
• Mobile Applications
• Contact Centers
Organization Sizes Covered:
• Small and Medium sized Enterprises (SMEs)
• Large Enterprises
• Personal Assistant
• Branding Advertisement
• Customer Services
• Data Privacy and Compliance
• Employee Engagement and On Boarding
• Payment Processing
• Customer Engagement and Retention
• Other Applications
End Users Covered
• Information Technology (IT) and Telecom
• Banking, Financial Services, and Insurance (BFSI)
• Media and entertainment
• Travel & Tourism
• Other End Users
• North America
Rest of Europe
• Asia Pacific
Rest of Asia Pacific
• South America
Rest of South America
• Middle East & Africa
Rest of Middle East & Africa
What our report offers:
- Market share assessments for the regional and country-level segments
- Strategic recommendations for the new entrants
- Covers Market data for the years 2020, 2021, 2022, 2025, and 2028
- Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
- Strategic recommendations in key business segments based on the market estimations
- Competitive landscaping mapping the key common trends
- Company profiling with detailed strategies, financials, and recent developments
- Supply chain trends mapping the latest technological advancements
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