Market Definition
Chatbots are computer programs built to facilitate conversations with humans & address their queries in natural languages through different communication mediums like chats, voice & video calls, emails, SMS, etc. These programs are being deployed increasingly across numerous organizations to improve customer service & reduce the overall operational costs while enhancing business productivity.
Market Insights
The Global Chatbots Market is projected to witness around 24.10% CAGR during the forecast period, i.e., 2021-26. The growth of the market is driven primarily by the mounting adoption of Chatbots and the integration of Artificial Intelligence (AI) in them to enhance interaction with the customers & solve their queries instantly, without the need for human intervention in noncritical situations.
Sectors like E-commerce, retail, banking & finance, & healthcare, among various others, are among the prominent adopters of Chatbots, principally to establish interactive conversations with customers and deliver enhanced engagement experiences. Besides, the growing demand for AI-based Chatbots is due to their benefits like lower operational costs, quicker response time, robust customer relationships, etc.
Moreover, with the swiftly rising number of small & medium-sized enterprises providing Chatbots, the global market is anticipated to observe significant growth in the coming years. In fact, these enterprises are developing bots for various messaging applications to resolve customer queries.
| Report Coverage | Details |
|---|---|
| Study Period | Historical Data: 2016-19 |
| Base Year: 2020 | |
| Forecast Period: 2021-26 | |
| CAGR | 24.1% |
| Regions Covered | North America: USA, Canada, Mexico |
| Europe: Germany, UK, France | |
| Asia-Pacific: China, India, Japan, Singapore | |
| South America: Brazil | |
| Middle East & Africa: UAE, Saudi Arabia | |
| Key Companies Profiled | IBM, Nuance Communications, Google (Dialog Flow), AWS, Artificial Solutions, Inbenta Technologies, AIVO, Chatfuel, and others |
| Unit Denominations | USD Million/Billion |
Impact of Covid-19 on the Global Chatbots Market
The Covid-19 pandemic had a decelerating effect on most industries but positively influenced the Global Chatbots Market. While this dreadful disease caused chaos & panic among people, the demand for Chatbots significantly rose across various nations worldwide.
It was to address & resolve customer queries & provide them with critical information like nearby cases, bed & vaccine availability, registered testing facilities, Covid-19 care hospitals & isolation centers, etc. The governments of different countries & many organizations dramatically adopted Chatbots to assist citizens amidst the crisis.
Presently, the pandemic situation is better than its advent. Yet, the market is anticipated to continue its expansion in the coming years. Several leading players are actively working on bringing innovations in Chatbots to improve customer experience & reduce human intervention.
Market Segmentation
Based on Verticals, the Global Chatbots Market segments into:
Of them all, the Healthcare sector displays significant market growth, owing to the increasing number of partnerships between healthcare providers & Chatbot manufacturers to provide instant health assistance to patients through communication mediums like calls, chats, & video chats, among others. In addition, with the integration of Artificial Intelligence (AI) & Machine Learning (ML) in Chatbots, patients can obtain instant information based on their symptoms and are assigned to the healthcare providers for deeper analysis.
In fact, Chatbots are now coming with image analysis, which is another aspect aiding in a better patient-doctor relationship and improved wellness assistance. While a nurse would spend around an hour a day to connect the patient with the doctor, Chatbots act instantly. Hence, they are gaining increasing traction across the Healthcare sector. With these benefits, several healthcare organizations are infusing their demand to facilitate patients with seamless assistance and introduce them to other services like tracking health, scheduling appointments, behavior monitoring, etc., via simple conversations through different communication mediums.
On the other hand, the Retail & E-Commerce Sector is anticipated to dominate the Global Chatbots Market with the largest share during the forecast period. It owes principally to the swiftly rising adoption of Chatbots across the retail stores & e-commerce platforms due to several benefits like reduced operational & marketing costs, constant customer support, and better business returns.
Since Chatbots do not require any human intervention for conversational solutions, they play a crucial role in benefiting companies in terms of cost-efficiency. E-Commerce platforms use Chatbots primarily to promote a brand, complete buyer's purchases, recommend products & services, and provide consistent customer support.
Nonetheless, the Banking, Financial Services & Insurance (BFSI) sector acquired the largest market share in recent years since Chatbots enable BFSI organizations to help consumers open accounts, check balances, save money, transfer funds, etc., with 24*7 availability and minimum response time.
Based on the Organization Size:
Of them all, Large Enterprises dominated the market with the largest share in the previous years and shall prevail the same trend during the forecast period. The dominance is principally due to the wide application of Chatbots across these enterprises as a primary source of communication for activities like customer services & engagement.
In addition, technological advancements like Artificial Intelligence & Machine Learning are further creating a massive shift from online mediums to messaging applications and allowing enterprises to build interfaces for delivering actionable business data. Large enterprises are actively optimizing Chatbots to improve customer support, leverage strong customer relationships for long-term revenue generation, & acquire sophisticated operations in the coming years.
On the other hand, based on the Interface, the market bifurcates into Standalone, Web-Based, and, Third-party/ Messenger Based. Of them all, Standalone Interface acquired the largest market share in recent years and shall continue the same in the coming years. The increasing prevalence of applications for virtual assistance like Google, Alexa, Siri for standalone messaging is upsurging the demand for these Chatbots and driving the global market.
Regional Landscape
Based on the Geography, the Global Chatbots Market expands across:
Of them all, Asia-Pacific is anticipated to demonstrate the fastest market growth during the coming years. It owes principally to the growing focus of the regional countries on digitalization, forming a pool of consumers for the Chatbots market. Besides, the region is driven by technological innovations to generate profitability for the market players in the coming years in terms of investments & revenue.
Moreover, the rapidly scaling communication & information technology infrastructures in Asia-Pacific, especially across economies like China & India, shall further fuel the demand for Chatbots in applications like personal assistance & customer engagement.
On the other hand, North America, a hub for various start-ups in Chatbots, held the largest market share. Several large enterprises are increasingly adopting Chabot systems to deliver 24*7 customer assistance, improve engagement, and build a robust company-customer relationship while reducing operational costs & enhancing efficiency. Several prominent businesses across North America are actively investing in deploying advanced messenger bots to deliver seamless services to their customers. For instance:
Nonetheless, Europe is projected to observe considerable growth for the Global Chatbots Market during the forecast period. It owes primarily to the mounting investments by the governments of many European countries in the deployment of Chatbots. For instance:
Recent Developments by Leading Companies
Market Dynamics:
Key Driver: Growing Demand for Consistent Customer Support at Lower Operational Costs
Chatbots are aiding several companies worldwide to streamline & optimize their customer services & swiftly becoming a critical aspect in delivering enhanced customer services. Industries like retail, e-commerce, healthcare, & finance, among various others, are rapidly shifting toward resolving customer queries instantly with the help of Chatbots. As a result, enterprises see them as a robust conversational interface that offers dynamic & engaging customer experiences. Hence, based on these aspects, Chatbots are observing an increasing adoption worldwide, and the same trend is likely to be followed in the years to come.
Possible Restraint: Possibilities of Security Breaches & Conversational Gaps
Most organizations use Chatbots as an interface for customer assistance & strategic branding. However, misinterpretation of requests, incorrect execution of commands, or challenges in understanding language or accents might refrain bots from making appropriate decisions, which might increase the possibility of data breaches and, as a result, restrain the overall market growth.
Growth Opportunity: Increasing Focus on Developing Self Learning Chatbots
Rapid R&Ds on Chatbots that could adapt to changing circumstances by observing the customer behavior, mood, & actions and deliver human-like conversations, experiences, & decisions are projected to create lucrative growth opportunities for the Global Chatbots Market during 2021-26.
The leading market players are taking various research initiatives toward developing these self-learning bots to enhance customer experience greatly by providing intelligent answers. Hence, with these initiatives and the burgeoning need for customized customer experience, self-learning Chatbots are likely to witness significant demand in the coming years, which, in turn, would boost the overall market.
Competitive Landscape
According to MarkNtel Advisors, the leading players in the Global Chatbots Market are IBM, Nuance Communications, Google (Dialog Flow), AWS, Artificial Solutions, Inbenta Technologies, AIVO, Chatfuel, etc.
Key Questions Answered in the Market Research Report:
Market Outlook, Segmentation, and Statistics
Frequently Asked Questions
A. The Global Chatbots Market is projected to grow at a CAGR of around 24.10% during 2021-26.
A. The Healthcare sector is anticipated to emerge as an opportunity area for the leading players in the Global Chatbots Market during 2021-26.
A. Enterprises actively looking for robust customer support services using Chatbots integrated with Artificial Intelligence to enhance customer engagement is the prime aspect projected to soar the demand for Chatbots and drive the global market during 2021-26.
A. Chatbots have assisted extensively across various sectors worldwide, especially by addressing queries associated with the Covid-19 pandemic in 2020. The same trend is likely to be followed in the coming years, along with the introduction of new services, owing to the active participation of leading players entwined with constant technological developments.
