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The Global Chatbot Market size is estimated to increase by USD 5.37 billion, at a CAGR of 35.27% between 2023 and 2028. The market is driven by various factors, notably the numerous benefits offered by chatbot solutions such as enhanced customer engagement and operational efficiency. There is a rising demand for web self-service options, with businesses increasingly turning to chatbots to provide instant assistance and streamline customer interactions. Moreover, the growing emphasis on enhancing Customer Relationship Management (CRM) strategies further drives the adoption of chatbot technology and generative AI, as businesses seek to deliver personalized and seamless customer experiences across various touchpoints. The market report also includes an in-depth analysis of drivers, trends, and challenges.
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The market is characterized by the integration of self-learning capabilities and advanced artificial intelligence technology, enabling chatbots to efficiently handle various customer service activities. Leveraging natural language processing (NLP) and AI technology, chatbots offer seamless messaging facilities across different industries, including financial organizations and grocery outlets. With their ability to understand user intent and provide prompt relevant answers, chatbots serve as virtual assistants, enhancing customer experience touchpoints and facilitating consumer analytics across diverse software applications.
The end-user segment of the market caters to organizations leveraging self-learning chatbots for various customer service activities. These chatbots offer messaging facilities through an open and AI-driven interface, providing seamless interactions with customers. Utilizing advanced APIs and neural network-based language models, organizations can deploy sophisticated chatbot solutions that enhance customer engagement and satisfaction. With the rise of AI chatbots, businesses across different sectors, including lawful interception, are tapping into the potential of these technologies to automate customer interactions and deliver personalized experiences efficiently. The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments
The market share growth by the retail segment will be significant during the forecast period. Retail is the fastest-growing market segment due to the growing adoption of e-commerce worldwide. Amazon, Flipkart, Alibaba, and Snapdeal are a few of the major e-commerce platforms.
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The retail segment was valued at USD 180.10 million in 2018 and continued to grow until 2022. The retailers are implementing to provide an enhanced experience to their customers while carrying out online product searches. The use of chatbots enables customers to get their queries related to payment methods for a particular product quickly and effectively. In addition, it help retail enterprises establish and maintain service levels for email responses to sales inquiries and online customer transactions. Such factors are expected to drive the growth of the global market in the retail segment during the forecast period.
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North America is estimated to contribute 36% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. In North America most Internet users use e-commerce sites such as Amazon to purchase goods. As more shoppers in North America are shifting to online shopping, e-commerce companies require solutions to handle customer queries and provide efficient customer services. The adoption is growing in the region due to the increase in demand for cost-effective and user-friendly.
Another reason for the growth in North America is the growing participation of online shoppers in live chats. The growing use of messengers and live chats allows customers to communicate in real time with customer service representatives through chatbots. Customers are increasingly engaging with chatbots, and more online buyers prefer using live chats to resolve their queries. The growing preference for live chats and virtual assistants (VAs) is attributed to the fact that they offer users swift responses and an efficient communication method. These factors have led to the growth of the Market in North America. during the forecast period.
The market is witnessing significant growth, driven by advancements in artificial intelligence technology, particularly in generative models and Natural Language Processing (NLP). With the emergence of sophisticated neural network-based language models like GPT-4 and LLMs, chatbot capabilities have evolved, enabling platforms like ChatGPT by OpenAI to provide highly responsive and intuitive conversational experiences. These self-learning chatbots are increasingly deployed across various sectors, including financial organizations and grocery outlets, to streamline customer service activities. Leveraging NLP and AI, chatbots interface seamlessly with users, enhancing customer experience touchpoints and delivering prompt, relevant answers to inquiries across diverse software applications. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The several benefits associated with using chatbot solutions are notably driving the market growth. It is a front-end interface, which is used to connect to various types of social media channels, such as websites, email, SMS, or messaging applications such as Facebook Messenger or Slack, through which users interact with the chatbot. The most popular messaging platforms to build customer support bots are Facebook Messenger, Kik, Skype, Twitter, SMS, Email, and Slack. The integrated conversational AI tools collect consumer data from support interactions and databases and are intelligent enough to provide a personalized experience. They can recognize human emotions such as anger, confusion, fear, and joy.
The advantages include 24/7 customer support, on-time responses, and a reduction in customer support costs. From providing lifestyle advice to customer support, chatbots are opening innovative ways of business-customer interaction. It can also be customized to establish a company’s brand personality and voice by linking to corporate knowledge bases and communication systems. This provides chatbots with an edge over other customer support options that are available in the market and fuels the market growth analysis of the chatbot market forecast.
One of the key market trends is the increasing adoption of chatbots in smartphones. The m-commerce and e-commerce markets are growing rapidly, with many end-users, such as the BFSI, retail, and travel sectors, inclined toward the adoption of m-commerce. Online activities such as online banking, purchase of goods, and bill payment are growing. Software developers are coming up with innovative applications such as messenger, gaming, and social media apps for use on mobile phones. People use these applications to interact, play, and browse information on mobile phones rather than on PCs.
Therefore, chatbot providers have developed chatbots specifically for smartphones and mobile phones to provide an easy self-service experience for users. Nuance Communications provides Nina mobile chatbot, which eliminates the need for customers to go to the company website, as their queries can be answered and resolved through apps. Therefore, the increasing mobility of chatbots with use In smartphones is a major chatbot industry trends, during the forecast period.
One of the major challenges impeding is the lack of awareness and standardization. Developing and underdeveloped countries lack proper IT infrastructure and have low company penetration, which leads to limited knowledge about such advanced technologies. Additionally, concerns raised over security, like privacy and security risks to the personal and sensitive data of customers, pose a threat to the growth of the global market. Such factors are limiting the revenue inflow into the market.
As some many sectors and countries remain untapped in the market, these countries offer vast future opportunities for services. However, tapping these markets can be challenging for companies owing to the limited resources and poorly developed IT infrastructure, which hinder the implementation of advanced technology. Thus, the lack of awareness and standardization can be a major challenge to the growth of the global market during the forecast period.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
247.ai Inc.: The company offers chatbot solutions to automate voice and digital interactions for improved customer CX and faster service with 24 7 AI Virtual Agent.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market is experiencing a surge in innovation driven by AI advancements and Artificial intelligence technology. Generative models like GPT-4 and LLMs are revolutionizing Natural Language Processing, enabling neural network-based language models to power sophisticated chatbots such as ChatGPT. These self-learning chatbots are reshaping customer service activities across diverse sectors, including financial organizations and grocery outlets. By leveraging APIs and cutting-edge NLP techniques, chatbots deliver seamless messaging facilities and enhance consumer analytics. With an open AI chatbot interface, businesses can optimize customer experience touchpoints by understanding user intent and delivering prompt relevant answers, thereby shaping the future of software applications and artificial intelligence.
The market is witnessing remarkable growth, driven by advancements in NLP technology and Supervised ML algorithms. These innovations enable chatbots to understand customer intent accurately, particularly in sectors like IT and ITeS, Telecom, and Healthcare. With the rise of audio/voice bots and voice assistant applications, businesses are enhancing customer service interactions through voice recognition capabilities. Standalone chatbots and website chatbots are empowering chatbot developers to cater to diverse needs, supporting marketing and sales teams in delivering correct information round the clock. Despite working hour limitations, chatbots facilitate in-store purchases and provide mobile alerts and updates for instant service and online shopping interactions, assisting consumers with product selections across various price ranges.
Market Scope |
|
Report Coverage |
Details |
Page number |
183 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 35.27% |
Market growth 2024-2028 |
USD 5.37 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
28.36 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 36% |
Key countries |
US, China, UK, Germany, and Japan |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
247.ai Inc., Acuvate, Aivo, Alphabet Inc., Amazon.com Inc., Artificial Solutions International AB, Avaamo Inc., Botsify, Conversica Inc., Creative Virtual Ltd., eGain Corp., Inbenta Holdings Inc., International Business Machines Corp., Kore.ai Inc., Meta Platforms Inc., Microsoft Corp., OpenAI L.L.C., Oracle Corp., ServiceNow Inc., and Zoom Video Communications Inc. |
Market dynamics |
Parent market analysis, market growth and trends, market forecast, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our chatbot market analysis report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Product
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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