The Chatbot Market is set to grow from its current market value of more than US$250million to over US$1.34billion by 2024, according to a new research report by Global Market Insights.
The chatbot market growth is attributed to the evolving usage of chatbots for content marketing activities such as digital marketing and advertising, with technological capabilities, individuality, and customisation being the main feature for accelerating market growth.
Chatbots assist the businesses to interact and engage with customers. They offer personalised marketing capabilities, such as sending individualised messages, to meet the rising consumer requirements.
The chatbot market is benefiting from the investments made by the leading investors, who back several chatbot startup firms. These funds are used by the startups for developing NLP technology and chatbot platforms.
For example, in 2017, Pypestream raised US$15million in funding to bring about developments in its chatbot platform. This enhanced marketing and promotions through the chatbot platform and increased customer service, transactions, and purchases.
Nevertheless, the lack of awareness about the benefits of chatbots amongst businesses and security issues concerned with chatbots may hinder its market growth.
Customer service applications
Customer service application accounts for the largest market share of 43% in 2017 in the chatbot market followed by social media, order processing, and marketing applications.
The advent of chatbots allows businesses to offer enhanced customer service by offering 24/7 customer support, real-time query handing, and educating the customers about new products and services.
The standalone interface segment dominates the market due to the benefits they offer such as ease-of-usage and installation at reduced costs.
The web-based chatbot is growing at a fast pace at a CAGR of 36.9% during the forecast period and is mainly beneficial for the companies selling products directly through their websites, making it an effective point-of-contact tool for delivering better customer experience and improved business margins.
The e-commerce segment is expected to benefit the most from the chatbot market. Due to the rapid development and growth of AI, chatbots are anticipated to get more sophisticated with time. This has increased the acceptance of chatbots in the e-commerce sector.
The usage of chatbots in the BFSI sector is growing rapidly due to the factors such as automated fraud prevention, assistance to customers in making improved financial decisions, and improved customer experience.
The AI-based chatbot market is growing at a CAGR of 53% as they provide highly conversational experiences through text and voice, which can be customised for use on various web browsers, mobile devices, and varied chat platforms.
Furthermore, increasing collaboration in the AI-based companies also drives the market growth. In 2017, the on-premise deployment model held approximately 83% in the chatbot market, offering users enhanced data security solutions and protecting customers’ personal and confidential business information, increasing its market demand.
Global chatbot market
North America held the majority of the share in the chatbot market as various tech companies in this country, such as IBM, Google, and CX Company are investing huge funds in R&D to implement new technologies and provide an improved user experience. These players are engaged in strategic partnerships and acquisitions to retain a huge market share and expand their presence worldwide.
Asia Pacific is anticipated to show the highest growth rate of 36% over the forecast timeline. As chatbots have turned into a necessity for mainstream industries, their usage has increased rapidly. Furthermore, there is an increase in the usage of mobile applications for travel, shopping, social networking, and education.
The global chatbot market is highly competitive as both startups and multinational firms are continuously involved in R&D activities to develop advanced technologies, driving the market growth.
Some of the major vendors operating in the industry include Baidu, Babylon Health, Google, Microsoft, Kik, Poncho, ReplyYes, LivePerson, Slack Technologies, and WeChat.
Written from press release by Leah Alger