A new report: “Chatbot Market” has shown the market is estimated to grow from USD 2.9 billion in 2020 to USD 10.5 billion by 2026, at a Compound Annual Growth Rate (CAGR) of 23.5% during the forecast period.
The adoption of chatbot solutions, according to the report by MarketsandMarkets, is considerable and is projected to grow at a good pace in the coming years.
One of the factors contributing to the growth of the chatbot market is the advent of technologies, such as analytics, AI, and cloud, which enable various industries to organize their operations.
Furthermore, the increasing customer demand for self-services is accelerating the adoption of chatbots, thus offering a competitive advantage to businesses.
Which companies are key players in the chatbot market?
MarketsandMarkets listed the following as some prominent key player:
- IBM (US)
- Microsoft (US)
- Oracle (US)
- Google (US)
- AWS (US)
- Nuance (US)
- Creative Virtual (UK)
- Artificial Solutions (Spain)
Continuing, the report contains that the chatbot market is estimated to witness a trivial slowdown in 2020 due to the global lockdown. The COVID-19 pandemic has increased the churn rate and shuddered almost every industry.
The lockdown is impacting global manufacturing, and supply chains and logistics as the continuity of operations for various sectors is badly impacted.
The sectors facing the greatest drawbacks are manufacturing, transportation and logistics, and retail and consumer goods.
The availability of essential items is impacted due to the lack of manpower to work on production lines, supply chains, and transportation, although the essential items are exempted from the lockdown.
The condition is expected to come under control by early 2021, while the demand for chatbot solutions and services is expected to increase due to the increasing demand for enhancing customer experience and building a personalized relationship with prospects.
Several verticals would deploy a diverse array of chatbot solutions and services to enable digital transformation initiatives, which address mission-critical processes, improve operations, and differentiate customer viewing experiences.
The reduction in operational costs, better customer experiences, resolution of customer queries, enhanced visibility into processes and operations, and improved real-time decision-making are key business and operational priorities that are expected to drive the adoption of chatbots.
The services segment is expected to grow at a higher CAGR during the forecast period
The global chatbot market is segmented on the basis of components into solutions and services. Based on the solutions segment, the market is divided into platform and software.
The services segment is further divided into managed services and professional services. The services segment is expected to grow at a higher CAGR during the forecast period.
The growing use of AI and analytics for policymaking, environmental analysis, and real-time decision-making is expected to increase the adoption of services.
The AI-based segment to grow at a higher CAGR during the forecast period
The global chatbot market is segmented on the baisis of type into into rule based and AI based. The AI-based segment is expected to at a higher CAGR during the forecast period.
Due to intelligent customer engagement and the self-learning process, the AI-based segment is anticipated to register the fastest growth during the forecast period.
The social media segment segment to grow at a higher CAGR during the forecast period
The global chatbot market by channel integration is segmented into websites, contact centers, social media, and mobile applications.
The market size of the social media segment is expected to grow at the highest CAGR during the forecast period. The surging chatbot integrations with social media, increasing awareness of chatbots, and rising need to improve Customer
Relationship Management (CRM) are some of the factors fueling the chatbot market growth. The mobile applications segment is expected to account for the largest market size during the forecast period.
Due to the provision of better user interface and experience, and 24/7 assistance and interactive experience in human language, the mobile applications segment is expected to grow during the forecast period.
The finance segment segment to grow at a higher CAGR during the forecast period
The global chatbot market by business function is segmented into IT Service Management (ITSM), HR, sales and marketing, and finance. Businesses are adopting digital transformation for modernizing customer communication and improving internal processes.
The finance business segment is expected to grow at the highest CAGR during the forecast period. The sales and marketing business function is expected to account for the largest market size during the forecast period, owing to the ease in the process of collecting data from customers to improve service/ product quality and conversion rates.
The data privacy and compliance segment segment to grow at a higher CAGR during the forecast period
The global chatbot market by application is segmented into customer service, personal assistant, branding and advertisement, customer engagement and retention, data privacy and compliance, employee engagement and on-boarding, payment processing, sales and marketing, and others (churn analysis, campaign management, news delivery, and data aggregation).
The use of chatbots is growing across these applications for increasing profit margins, reducing costs, and enhancing operational efficiency.
The data privacy and compliance segment is expected to grow at the highest growth rate during the forecast period, owing to the icreasing use of chatbots to identify data, such as locations, IP addresses, company details, phone numbers of users, and email addresses.
Among verticals, the healthcare and life sciences segment to grow at the highest CAGR during the forecast period
The chatbot market is segmented into the various verticals, particularly BFSI, IT and telecom, retail and eCommerce, healthcare and life sciences, transportation and logistics, government, travel and hospitality, media and entertainment, and others (education, energy and utilities, and manufacturing).
Key factors favoring the growth of chatbots across these verticals include the rising technology advancements and growing availability of industry-specific chatbots.
Healthcare and life sciences vertocal is expected to grow at the highest CAGR during the forecast period.
Chatbots have the potential to revolutionize healthcare. They can substantially boost efficiency and improve the accuracy of symptom collection and ailment identification, preventive care, post-recovery care, and feedback procedures.
APAC to grow at a higher CAGR during the forecast period
The chatbot market has been segmented into five regions: North America, Europe, APAC, MEA, and Latin America. Among these regions, North America is projected to hold the largest market size during the forecast period. APAC is expected to grow at the highest CAGR during the forecast period.
Countries in APAC are technology-driven and present major opportunities in terms of investments and revenue. These countries include China, Singapore, Japan, and India.
Factors such as flexible economic conditions, industrialization- and globalization-motivated policies of governments, and digitalization are expected to support the growth of the chatbot market in APAC.