The chatbot market was valued at USD 17.17 billion in 2019, and is projected to reach USD 102.29 billion by 2025, registering a CAGR of 34.75% over the forecast period, 2020 - 2025. The demand for voice-activated smart devices is gaining high traction due to their high convenience and fully automated processes. Notably, smart speakers, in particular, is becoming ubiquitous.
- A chatbot is basically an artificial intelligence powered application, which converses with a human being to solve a problem or to answer a certain query. This reduces the operational time and enhances efficiency, which is likely to boost the market growth.
- Furthermore, according to Facebook as of early 2018, about 1.4 billion people used messenger applications and are rapidly willing to converse with a chatbot, which is expected to have a positive impact on the market growth over the forecast period.
- Though the adoption of the chatbot is at a nascent stage, the adoption rate is increasing. But the relative lack of awareness and convenience has been one of the major issues identified over the last few years restraining the growth of the market, with some of the major vendors looking to address them by introducing interactive features in the product.
- Additionally, in banking and financial industry, the attempt to mitigate the need for live call centers and slit excess costs which are very significantly visible can be achieved with the introduction of the chatbot.
Scope of the Report
A chatbot is an artificial intelligence (AI) software that can simulate a conversation (or a chat) with a user in natural language through messaging applications, websites, mobile apps or through the telephone.
Key Market Trends
Retail Sector to Witness High Growth
- In today's times, the retail offerings are huge, which creates difficulty for a user to navigate through all of them. Though options, such as search and filter are provided by the companies, but they can be clumsy at time's for a user to navigate. In the retail industry, chatbot basically replicates the real-life experience of the store, wherein the users have to post their desired products and suggestions would be provided by the bot.
- Many retail companies are incorporating their chatbot application to various widely-used messaging apps to offer rich customer experience and solve customer queries.
- Global retail outlets, such as Domino's are leveraging the advantages of artificial intelligence and machine learning through chatbots, wherein a user can place an order directly through messenger. In February 2017, the company launched its first chatbot integrated with Facebook messenger, which is expected to have an immense impact on the market growth over the forecast period.
Asia Pacific to Witness the Highest Growth
- In the Asia-Pacific region, there are numerous startups investing in chatbot technology and machine learning technology. Additionally, small and mid-sized enterprises are rapidly integrating the usage of chatbots in their customer service process offering seamless performance, handling a large number of consumers, and enhancing the customer-engagement techniques.
- For instance, Singapore Life, a Singapore-based insurer, in June 2018, built self-learning chatbot, which made the company’s services more accessible to the public through Facebook and other platforms and easier to understand, which is likely to boost the market growth in the region over the forecast period.
- With the rapidly expanding information and communications technology infrastructure in leading economies such as China and India in this region, the market is expected to grow further.
- With the massive population and rising adoption of smartphone users in the region, it is forming a highly promising consumer pool for chatbot market, especially for applications such as personal assistant.
The chatbot market is highly competitive owing to the presence of many small and large players in the market. The market is moderately concentrated with the key players adopting strategies like product innovation to stay ahead of the competition. Some of the players in the market are IBM Corporation, Dialogflow (Google), Amazon Web Services, Inc. (Amazon Lex) among others.
- May 2018: eGain launched Solve, a solution for Amazon Connect based on Amazon Web Services (AWS) cloud infrastructure, which is expected to enhance the consumer experience and mitigate the latency.
- July 2018 - IBM introduced Watson Tone Analyzer, which is expected to make chatbots more astute to emotions, which is expected to boost the utilization and help the company to garner higher market share across the world.
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1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Overview
4.2 Introduction to Market Drivers and Restraints
4.3 Market Drivers
4.3.1 Rising Domination of Messenger Applications
4.3.2 Increasing Demand for Consumer Analytics
4.4 Market Restraints
4.4.1 Lack of Awareness and Integration Complexities
4.5 Value Chain Analysis
4.6 Industry Attractiveness - Porter's Five Force Analysis
4.6.1 Threat of New Entrants
4.6.2 Bargaining Power of Buyers/Consumers
4.6.3 Bargaining Power of Suppliers
4.6.4 Threat of Substitute Products
4.6.5 Intensity of Competitive Rivalry
5 MARKET SEGMENTATION
5.1 By Type
5.2 By Deployment
5.3 By End-user Vertical
5.3.3 IT and Telecommunication
5.3.7 Other End-user Verticals
5.4.1 North America
5.4.4 Latin America
5.4.5 Middle East & Africa
6 COMPETITIVE LANDSCAPE
6.1 Company Profiles
6.1.1 IBM Corporation
6.1.2 eGain Corporation
6.1.3 Nuance Communications
6.1.4 Creative Virtual Ltd
6.1.5 Artificial Solutions Inc.
6.1.6 Next IT Corp
6.1.7 7.ai, Inc.
6.1.11 Bold360 ai
6.1.12 Dialogflow (Google)
6.1.13 Amazon Web Services, Inc. (Amazon Lex)
6.1.14 LiveChat, Inc.
7 INVESTMENT ANALYSIS
8 MARKET OPPORTUNITIES AND FUTURE TRENDS
Secondary Research Information is collected from a number of publicly available as well as paid databases. Public sources involve publications by different associations and governments, annual reports and statements of companies, white papers and research publications by recognized industry experts and renowned academia etc. Paid data sources include third party authentic industry databases.
Once data collection is done through secondary research, primary interviews are conducted with different stakeholders across the value chain like manufacturers, distributors, ingredient/input suppliers, end customers and other key opinion leaders of the industry. Primary research is used both to validate the data points obtained from secondary research and to fill in the data gaps after secondary research.
The market engineering phase involves analyzing the data collected, market breakdown and forecasting. Macroeconomic indicators and bottom-up and top-down approaches are used to arrive at a complete set of data points that give way to valuable qualitative and quantitative insights. Each data point is verified by the process of data triangulation to validate the numbers and arrive at close estimates.
The market engineered data is verified and validated by a number of experts, both in-house and external.
REPORT WRITING/ PRESENTATION
After the data is curated by the mentioned highly sophisticated process, the analysts begin to write the report. Garnering insights from data and forecasts, insights are drawn to visualize the entire ecosystem in a single report.