Global Conversational AI Market - Industry Trends and Forecast to 2029

Global Conversational Artificial Intelligence (AI) Market, By Component (Platform, Services), Type (Intelligent Virtual Assistants, Chatbots), Technology (Machine Learning and Deep Learning, Natural Language Processing, Automated Speech Recognition), Deployment Model (0n-Premises, Cloud), Application (Customer Support, Personal Assistant, Branding and Advertisement, Customer Engagement and Retention, Onboarding and Employee Engagement, Data Privacy and Compliance, Others), Organization Size (Large Enterprises, Small and Medium-Sized Enterprises), Business Function (Sales and Marketing, Finance, HR, Operations, IT Service Management), Mode of Integration (Web-based, App-based, Telephonic), End User (Banking, Financial Services, and Insurance, Retail and Ecommerce, Healthcare and Life Sciences, Travel and Hospitality, Telecom, Media and Entertainment, Others) – Industry Trends and Forecast to 2029.

Conversational Artificial Intelligence (AI) Market Analysis and Size

Customer satisfaction is one of the primary objectives of any given business or organization. Maximizing customer satisfaction along with improving the customer retention quotient is what major industries are focusing. The advanced technologies in the market allow customer handling via chatbots and virtual assistants effectively without hampering the business processes. One such technology is conversational artificial intelligence (AI).

Global conversational artificial intelligence (AI) market was valued at USD 6.77 billion in 2021 and is expected to reach USD 37.94 billion by 2029, registering a CAGR of 24.04% during the forecast period of 2022-2029. In addition to the market insights such as market value, growth rate, market segments, geographical coverage, market players, and market scenario, the market report curated by the Data Bridge Market Research team includes in-depth expert analysis, import/export analysis, pricing analysis, production consumption analysis, and pestle analysis.

Conversational Artificial Intelligence (AI) Market Scope and Segmentation

Market Definition

From the name itself, it is clear that conversational artificial intelligence (AI) is a technology in the form of virtual agents/ assistants or catboats that are used by businesses/ organizations to communicate and interact with a complex system in a user-friendly, fast and reliable manner. Conversational artificial intelligence (AI) is based on a mix of technologies such as machine learning, natural language processing and artificial intelligence which help to improve the response quality over time with improvement in learning.

Conversational Artificial Intelligence (AI) Market Dynamics

This section deals with understanding the market drivers, advantages, opportunities, restraints and challenges. All of this is discussed in detail as below:

Drivers

• The trend of AI-powered customer support services

Growing awareness about the benefits of virtual robots and AI-powered chatbots to maximize the customer satisfaction and engagement rates, streamline the business processes and gain deeper business insights is positively influencing the market growth rate. Further, the integration of natural language processing and automated speech recognition technologies will spread positive word of mouth in the global territories.

• Growth and expansion

Growth and expansion of various end-user verticals such as banking, financial services, and insurance, retail and e-commerce, healthcare and life sciences, travel and hospitality, telecom, media and entertainment and others is fostering the market growth rate. Increased focus of these industries towards improving the customer care services will carve down greater opportunities.

Furthermore, the factors such as rising urbanization, industrialization and mounting need to extract in-depth insights from growing volumes of data and achieve benchmarking during the forecast period are some other important market drivers. Additionally, rising investment by the enterprises on integrated technologies combined with reduced costs for chatbots development are anticipated to drive the market's growth rate.

Opportunities

• Rising adoption of advanced technologies

It is projected that a new form of communication will develop as a result of the rapid uprooting of current mobile and web services by speech-based and AI-powered messaging apps. Chatbots and other digitalized platforms are used in conversational artificial intelligence to provide clients with a platform where they can solve their problems and communicate with virtual assistants.

• Increasing trend of digitalization

Additionally, the increasing trend of digitalization further offers numerous growth opportunities within the market. The rising number of BPOs, increased penetration rate of smartphones and other consumer electronics and complete digitization of operations will also work in favor of the market.

Restraints/Challenges

• Accuracy issues and concerns

Lack of accuracy in virtual assistants and chatbots will prove to be the biggest challenge for the market. Technical failure and accuracy problems are common with low cost or cheap chatbots. Chatbots and virtual assistants will take some time to attain the desired level of accuracy as these can only reply to certain queries of the customer with the information stored in the database.

• Lack of awareness and technical expertise

The dearth of expert knowledge and technical expertise and lack of awareness, especially in underdeveloped economies will create hurdles for the market regarding the smooth growth in the market value. For instance, India and Brazil are the two countries that use cell phones the most, yet they are less aware of the advantages of technology than industrialized nations like Europe and North America are. Furthermore, according to a recent HubSpot poll, only 37% of consumers are aware of AI.

This conversational artificial intelligence (AI) 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 conversational artificial intelligence (AI) market contact Data Bridge Market Research for an Analyst Brief, our team will help you take an informed market decision to achieve market growth.

COVID-19 Impact on Conversational Artificial Intelligence (AI) Market

The COVID-19 pandemic has positively affected the market owing to the large scale adoption of content based platforms. Several lockdown and movement restrictions during the pandemic promoted the deployment of conversational artificial intelligence (AI) services in both developed and developing economies. Work from home became a trend for all the industries, thereby leading to the increased deployment of conversational AI. A range of industries has also accepted these solutions during the pandemic, such as healthcare, education, travel, and tourism. Though the on premise segment was adversely hit during this phase, on the other hand, the cloud based segment saw a sharp rise.

Recent Developments

• Vertex AI, a managed machine learning (ML) platform that enables businesses to expedite the development and maintenance of artificial intelligence (AI) models, will be generally available starting in March 2021, according to Google Cloud.

• Microsoft said in April 2021 that it would buy Nuance Communications, a leader in AI-based technologies, for USD 19.7 billion in an all-cash deal. Microsoft's voice recognition and transcription technology capabilities will be enhanced with the acquisition of Nuance.
• In September 2021, Astro will be released as a brand-new and distinctive type of robot that can assist users with various duties, including home monitoring and staying in touch with loved ones.

Conversational Artificial Intelligence (AI) Market Scope

The conversational artificial intelligence (AI) market is segmented on the basis of component, type, technology, deployment model, application, organization size, business function, mode of integration and end user. 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.

Component  

• Platform
• Services
• Training and Consulting
• Support and Maintenance
• Deployment and Integration

Type

• Intelligent Virtual Assistants
• Chatbots

Technology

• Machine Learning and Deep Learning
• Natural Language Processing
• Automated Speech Recognition

Deployment Model

• On-Premises
• Cloud

Organization Size

• Large Enterprises
• Small and Medium-Sized Enterprises

Application

• Customer Support
• Personal Assistant
• Branding and Advertisement
• Customer Engagement and Retention
• Onboarding and Employee Engagement
• Data Privacy and Compliance
• Others

Business Function

• Sales and Marketing
• Finance
• HR
• Operations
• IT Service Management

Mode of Integration

• Web-based
• App-based
• Telephonic

End User

• Banking, Financial Services, and Insurance
• Retail and Ecommerce
• Healthcare and Life Sciences
• Travel and Hospitality
• Telecom
• Media and Entertainment
• Others

Conversational Artificial Intelligence (AI) Market Regional Analysis/Insights

The conversational artificial intelligence (AI) market is analyzed and market size insights and trends are provided by country, component, type, technology, deployment model, application, organization size, business function, mode of integration and end user as referenced above.

The countries covered in the conversational artificial intelligence (AI) 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 conversational artificial intelligence (AI) market due to the presence of major players in this region and the growing demand for enhancing customer support service to enhance customer satisfaction and improve retention rates. Prevalence of advanced infrastructure in combination with surging adoption rates of augmented and virtual reality technologies are some other important factors determining the dominance of this region.

Asia-Pacific is expected to witness significant growth during the forecast period of 2022 to 2029 due to the rising awareness of innovative customer support technologies and services in the developing economies such as China and India. Moreover, escalating IT infrastructure in the region coupled with rapidly growing healthcare consciousness among the people will yet again bolster the growth of the market in this region.

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.   

Competitive Landscape and Conversational Artificial Intelligence (AI) Market Share Analysis

The conversational artificial intelligence (AI) 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 conversational artificial intelligence (AI) market.

Some of the major players operating in the conversational artificial intelligence (AI) market are

• Google, LLC (U.S.)
• Microsoft (U.S.)
• IBM (U.S.)
• Amazon Web Services, Inc. (U.S.)
• Baidu (China)
• Oracle (U.S.)
• SAP SE (Germany)
• FIS (U.S.)
• Artificial Solutions (Sweden)
• Kore.ai, Inc. (U.S.)
• Conversica, Inc. (U.S.)
• Inbenta Holdings Inc. (U.S.)
• Creative Virtual Ltd. (U.S.)
• SoundHound AI, Inc. (U.S.)
• Avaamo (U.S.)
• Jio Haptik Technologies Limited (U.S.)
• Solvvy (U.S.)
• Cisco Systems, Inc. (U.S.)
• Kasisto (U.S.)
• Gupshup (U.S.)