Global Chatbot Market Size, Share, and Trends Analysis Report – Industry Overview and Forecast to 2031

Chatbot Market Analysis

Over the projected period, virtual assistants, such as chatbots and smart speakers, are used for various applications across several end-user industries, such as retail, BFSI, healthcare, and others. For instance, the banking sector has been a significant adopter of newer technologies such as natural language processors (NLP) and application programming interface (API), due to the chatbot's dependence on speed, trust, communication, and integrated assistance. Chatbots in the various sectors has facilitated communication and build customer relation through cognitive analytics by learning customers' thinking for instant assistance. Thus, the market is projected to witness substantial growth throughout forecast period.

Chatbot Market Size

Global chatbot market size was valued at USD 5.34 billion in 2023 and is projected to reach USD 26.37 billion by 2031, with a CAGR of 22.10% during the forecast period of 2024 to 2031.

Report Scope and Market Segmentation       

Chatbot Market Definition

A chatbot is an artificial intelligence-powered application that converses with a human being to solve a problem or answer a certain query. The primary purpose of chatbot is to facilitate communication and build customer relation through cognitive analytics and is an interactive application developed using either a set of rules or artificial intelligence technology (AI), designed to interact with humans through the textual conversation process and is integrated with various messaging services, thereby assisting users in various sectors. This reduces the operational time and enhances efficiency, which aids the market growth.

Chatbot Market Dynamics

Drivers

• Integrated Assistance at Lower Operational Cost

Chatbots are granting 24/7 assistance to customers, thereby generating an enhanced and optimized customer experience. Various industries in sectors such as retail and e-commerce have shifted their preference towards resolving customer queries in minimal time and this factor has become a key factor of every organization. Hence, chatbot becomes a powerful conversational interface for engaging customers effectively and providing them with a dynamic and rich user experience environment. It also assists users in making payments, saving money, transferring funds, and checking balances, thereby improving the customer service quality.

• Technological Advancements in Chatbots

Technological advancements and features in the chatbots software such as natural language processor (NLP), interference engine, cloud-based deployment, application programming interface (API) and various other advancements such as multichannel are projected to increase the market growth rate significantly over the forecast period.

Opportunities

• Self-learning Chatbots -An Integrated Experience

Self-learning chatbots are adaptable to changing conditions and can learn from customer actions and decisions. They analyze the data in minimal time and help the customer conveniently find the exact information they are looking for by offering support in multiple languages. The data-driven behavior recognizes them and self-learning capability are powered by NLP. They also learn from their mistakes and thus, can deliver human-like response and enhance the outcome.

• Rising Initiatives in Various Sectors

Additionally, various initiatives are being undertaken for the development of self-learning chatbots such as data scientists from Facebook and researchers from Stanford University recently formed a partnership to develop self-learning chatbots and are focusing on the integration of reinforcement learning technology instead of general intelligence, with the intent to avoid scenarios where technology can go wrong. These initiatives are still in the research phase, along with other plans to create advanced chatbots that can intelligently react upon user feedback. These initiatives and the growing need to deliver customized experiences are expected to create the demand for self-learning chatbots over the forecasted period.

Restraints/Challenges

• Lack of Awareness of Effects of Chatbot Technology

Though the adoption of chatbots solutions is increasing among various industries, challenges related to the effective utilization and limited awareness about the benefits offered by AI-powered chatbot solutions may limit the adoption of chatbot solutions among developing regions such as Latin America and Africa. Moreover, large organizations are at the forefront of adopting chatbot solutions; however, Small and Medium-sized Enterprises (SMEs) have limited adoption of the same, owing to the cost associated with their maintenance and lack of skilled resources.

• User's Voice Authentication

There are two available voice authentication techniques that need more capabilities to be a good standalone method for authenticating users. The first approach of authentication is to have individuals repeat the same sentence multiple times and create a very general template made up of a wide range of voice prints. When users speak in the future, the new voice prints generated can be matched with their old voice prints to authenticate them. The disadvantage of this approach is that voiceprints are more generic and thus, cannot be authenticated at the same level of accuracy used for authenticating the voiceprints generated with a single passphrase. The second approach is to create a voiceprint using a single phrase or word and store it for the individual voiceprint. However, third parties can use this approach to record authentication attempts and replay them to gain access.

This chatbot market report provides details of new recent developments, trade regulations, import-export analysis, production analysis, value chain optimization, market share, impact of domestic and localized market players, analyses opportunities in terms of emerging revenue pockets, changes in market regulations, strategic market growth analysis, market size, category market growths, application niches and dominance, product approvals, product launches, geographic expansions, technological innovations in the market. To gain more info on the chatbot market contact Data Bridge Market Research for an Analyst Brief, our team will help you take an informed market decision to achieve market growth.

Chatbot Market Scope

The global chatbot market is segmented on the basis of type, product landscape, organizational size, application and end-use. The growth amongst these segments will help you analyze meagre growth segments in the industries and provide the users with a valuable market overview and market insights to help them make strategic decisions for identifying core market applications.

Type

• Standalone
• Web-based
• Third party/Messenger-based

Product Landscape

• Artificial Intelligence
• Marketing
• Human Intelligence

Organizational Size

• Small Enterprise
• Medium Enterprise
• Large Enterprise

Application

• Bots for Social Media
• Bots for Service
• Bots for Marketing
• Bots for Payments/ Order processing
• Others

End-user

• Healthcare
• BFSI
• Retail
• Travel & Tourism
• Media and Entertainment
• E-commerce
• Others

Chatbot Market Regional Analysis

The chatbot market is analyzed and market size insights and trends are provided by type, product landscape, organizational size, applications and end-use as referenced above.

The countries covered in the chatbot market report are U.S., Canada and Mexico in North America, Germany, France, U.K., Netherlands, Switzerland, Belgium, Russia, Italy, Spain, Turkey, Rest of Europe in Europe, China, Japan, India, South Korea, Singapore, Malaysia, Australia, Thailand, Indonesia, Philippines, Rest of Asia-Pacific (APAC) in the Asia-Pacific (APAC), Saudi Arabia, U.A.E, Israel, Egypt, South Africa, Rest of Middle East and Africa (MEA) as a part of Middle East and Africa (MEA), Brazil, Argentina and Rest of South America as part of South America.

North America dominates the chatbot market because of the high adoption of technology in the advancing countries within the region over the forecast period due to significant benefits that it offers to enterprises, such as reduced operating costs, improved customer satisfaction, and enhanced operating efficiency. Moreover, the growth of the chatbot system within the next-generation operation systems and software is further estimated to accelerate the expansion.

Asia-Pacific is expected to witness significant growth from 2024 to 2031 due to the increasing need for chatbot services within the region. The rapidly shifting workload to chatbot assistance is also a significant contributor to the regional market expansion.

The country section of the report also provides individual market impacting factors and changes in regulation in the market domestically that impacts the current and future trends of the market. Data points like down-stream and upstream value chain analysis, technical trends and porter's five forces analysis, case studies are some of the pointers used to forecast the market scenario for individual countries. Also, the presence and availability of global brands and their challenges faced due to large or scarce competition from local and domestic brands, impact of domestic tariffs and trade routes are considered while providing forecast analysis of the country data.   

Global Chatbot Market Share

The chatbot market competitive landscape provides details by competitor. Details included are company overview, company financials, revenue generated, market potential, investment in research and development, new market initiatives, global presence, production sites and facilities, production capacities, company strengths and weaknesses, product launch, product width and breadth, application dominance. The above data points provided are only related to the companies' focus related to chatbot market.

Chatbot Market Leaders Operating in the Market Are:

• Aivo LLC (U.S.)
• Artificial Solutions (Sweden)
• Creative Virtual Ltd. (U.K.)
• Inbenta Holdings Inc. (U.S.)
• IBM (U.S.)
• eGain Corporation (U.S.)
• Nuance Communications, Inc. (U.S.)
• Google (U.S.)
• Amazon Web Services, Inc. (U.S.)
• smartbots (U.S.)
• Contus (India)
• CogniCor Technologies, (U.S.)
• Conversica,Inc. (U.S.)
• Kevit (India)
• Anboto (Europe)
• Cyfuture India Pvt. Ltd. (India)

Latest Developments in Chatbot Market

• In February 2021, Nuance announced the acquisition of Saykara, Inc., a like-minded startup focused on developing a mobile AI assistant to automate clinical documentation for physicians. The acquisition underscores Nuance's ongoing expansion of the market and technical leadership that further leads to the growth of the communication and technical sector
• In January 2020, Google launched Meena, an AI chatbot. It is a multi-turn open-domain chatbot trained end-to-end on data mining. The neutral network of Meena contains about 2.6 billion parameters
• In January 2020, QliqSOFT, specializing in secure, HIPAA-compliant clinical communication solutions, announced the launch of its healthcare chatbot platform, Quincy. Quincy offers chatbot templates that address care-specific use cases, including pre-configured intents and dialogue flows or customized chatbots that can be built to suit unique customer needs
• In April 2020, the WHO launched a Facebook Messenger version of its WHO Health Alert platform that offers instant and accurate information about COVID-19 via Facebook's global reach

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