Chatbot Market to Witness over 20% CAGR until 2028
The global chatbot market is growing at a high CAGR because of the rising adoption of artificial intelligence into business operations along with the flourishing e-commerce and BFSI sector that is significantly investing in chatbot integration to improve customer engagement and satisfaction.
A recent study conducted by the strategic consulting and market research firm, BlueWeave Consulting, revealed that the chatbot market was worth USD 3.4 billion in the year 2021. It is estimated to grow at a CAGR of 23.40%, earning revenues of around USD 15 billion by 2022. The global chatbot market is flourishing at a high rate owing to the rising adoption of artificial intelligence into business operations along with the flourishing e-commerce and the BFSI sector that is significantly investing in chatbot integration to improve customer engagement and satisfaction. Chatbots are also gaining significant traction among small and medium-sized businesses due to the entry of chatbots startups in the market, which is anticipated to drive market growth in the forecast period.
Increasing Adoption of Chatbots in Large Enterprises
The chatbot market is segmented into large enterprises, and small and medium-sized enterprises, based on organization size. The large enterprise segment accounts for the highest share in the market owing to their large consumer base and higher volume of grievances compared to SMEs. This is why larger organizations invest in the adoption of chatbots to boost their customer engagement. However, the small and medium-sized enterprises are projected to witness the highest CAGR during the forecast period.
Rising Demand for Real-Time Customer Service is Boosting Chatbot Market
The chatbot market is segmented into customer service, personal assistant, branding and advertisement, customer engagement and retention, data privacy and compliance, employee engagement and onboarding, payment processing, and others, based on application. The customer service segment holds the largest market share as it allows 24x7 service and the customers get an instance and real-time responses along with saving the cost of the company. Therefore, several leading companies such as Starbucks, Spotify, Whole Foods, Mastercard, etc., are opting for chatbots, which is driving its overall market growth.
Chatbot Market - By End-User
Based on end-users, the chatbot market is segmented into banking, financial services, insurance, information technology, telecom, retail and e-commerce, healthcare and life sciences, travel and hospitality, media and entertainment, transportation and logistics, government, and others. The e-commerce segment accounts for the largest market share owing to the flourishing online sales market and large volumes of customer issues regarding the platform, services, and orders. Following e-commerce, the BFSI segment also covers substantial market share due to the increasing penetration of online payment platforms and rising demand for real-time and secure grievance redressal.
Chatbot Market - Regional Insights
Geographically, the chatbot market is segmented into North America, Europe, Asia-Pacific, Latin America, Middle-East & Africa. North America dominates the chatbot market, followed by Europe. However, the Asia-Pacific region is projected to witness the highest growth rate during the forecast period. The flourishing e-commerce and BFSI sector along with rising IT infrastructure development in emerging economies including India, China, South Korea, Japan, etc., acts as a major driving factor for the growth of the chatbot market. Furthermore, increasing chatbot startups offering services at minimal costs that are proving to be budget-friendly for SMEs is also fueling the growth of the market.
Impact of COVID-19 on Chatbot Market
The unprecedented COVID-19 pandemic outbreak initially negatively impacted the growth of the chatbot market. The pandemic affected the financial capability of the businesses, due to which the demand for chatbot integration witnessed a sharp decline during this period. However, the market is projected to grow tremendously during the forecast period owing to the rising internet traffic and increasing screen time of the internet users, which is propelling the need for real-time and 24x7 available assistance. Furthermore, chatbots are also assisting the healthcare industry to manage critical and less urgent cases, which is anticipated to emerge as a major driving factor for market growth.
The leading market players of the chatbot market are Aivo, Botscrew, Cleverbot, MobileMonkey, IBM Corporation, LiveChatInc., eGain Corporation, Dialogflow, Nuance Communications, Artificial Solutions Holding ASH AB, Creative Virtual Ltd., Avaamo Inc., Kore.ai Inc., EdgeVerve Systems Limited, SMOOCH.ai, Inbenta Technologies Inc., Botsify Inc., Next IT Corp., Creative Virtual Ltd., and other prominent players.
The chatbot market is extremely competitive with the presence of numerous global as well as regional market players. Several startups are also emerging, giving tough competition to the established players. The companies significantly focus on improving and expanding their offerings and chatbot capabilities to gain a competitive edge. They also prominently adopt competitive strategies such as partnerships, mergers, acquisitions, joint ventures, etc., to stay ahead in the market.
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The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the chatbot market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the chatbot market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.