Conversational Systems Market Size
|Study Period:||2018 - 2028|
|Fastest Growing Market:||Asia Pacific|
|Largest Market:||North America|
*Disclaimer: Major Players sorted in no particular order
Need a report that reflects how COVID-19 has impacted this market and it's growth?
Conversational Systems Market Analysis
The conversational system market is expected to register a CAGR of 15.6% during the forecast period.
- Conversational systems are intelligent machine solutions that understand language and conduct verbal or written customer conversations. These systems are aimed at improving the customer experience by boosting interaction. The availability of large amounts of data and increasing data-related complexities in enterprises are expected to drive the market demand for conversational system solutions. Further, the requirement of artificial intelligence (AI)-enabled systems to mimic human brains is one of the crucial parameters responsible for the development of the industry.
- The usage of conversational systems is increasing because of deep neural networks, machine learning, and other advancements in AI technologies. Conversational systems like chatbots are used for various applications across several end-user verticals. One primary consumer-facing application is a conversational system as a personal assistant. It helps consumers accomplish various tasks; for instance, Apple's Siri offers an intuitive interface for connected homes or cars.
- An organization can simplify and reimagine business processes through conversational software platforms and reduce and automate business workflows through context-aware intelligence systems. These platforms enable users and systems to have meaningful interactions and work in tandem to meet business objectives.
- Furthermore, integrating artificial intelligence (AI) capabilities with conversational systems provides significant opportunities for growth in the global conversational systems market. Various factors, such as a lack of understanding of developing technologies and these systems' dependency on deployment platforms, are projected to hinder market expansion. Additionally, a lack of accuracy in virtual assistants and chatbots is expected to limit the market growth.
- However, the COVID-19 pandemic boosted the conversational systems market. The growing need for clarification significantly increased consumer calls, imposing further strain on contact centers. As a result, the use of conversational solutions in contact centers is projected to accelerate. These tools enable users to obtain information via voice or text-based engagement platforms, resulting in increased usage of these novel communication channels during the coronavirus epidemic.
Conversational Systems Industry Segmentation
A conventional system is a technology that processes and converts simple bidirectional text and conversation into meaningful output. Traditional systems are sophisticated instruments equipped with sensors, IoT systems, and appliances. These systems use enhanced methods of communication, such as sight, sound, and tactile, to communicate across a digital device network.
The conversational systems market is segmented by modality type (uni-modal and multi-modal), by type (voice assisted and text assisted), by deployment (on-premise, cloud), by enterprise size (small & medium enterprises, large enterprises), by end-user verticals (IT & telecommunication, BFSI, government, retail, energy & power, and other end-users), and geography (North America, Europe, Asia Pacific, Latin America, and Middle East and Africa).
The market sizes and forecasts are provided in terms of value in USD million for all the above segments.
|By Modality Type|
|By Enterprise Size|
|Small & Medium Enterprises|
|By End-user Verticals|
|IT & Telecommunication|
|Energy & Power|
|Other End-User Verticals (Educational Institutions, Travel & Tourism, Transportation & Logistics)|
|Middle East and Africa|
Conversational Systems Market Trends
Rising Usage of AI-based Solutions for Customer Services Drives the Market Growth
- Artificial intelligence (AI)-powered customer support services assist organizations in increasing loyalty, online customer experience, preventive assistance, brand reputation, and even revenue growth. Natural language processing (NLP) and dialog-exchanging tool advances will drive market growth.
- Various contact centers are emphasizing conversational systems because they enable contact centers to AI automate speech-enabled apps and messages for interactions between computers and humans. Additionally, these systems understand client intent in various languages and reply to their inquiries accordingly. Many people throughout the globe use AI-based solutions like messaging platforms and speech-based assistants to connect with businesses. As a result, AI speech-based, and messaging platforms are quickly supplanting traditional mobile and web apps as the new interactive medium for interactions.
- Increasing smartphone demand and customer involvement via different social media channels will drive market expansion. Several organizations emphasize integrating AI in conversational technologies into social media marketing campaigns. Conversational technologies such as AI-based smart chatbots are utilized in social media sites to automate customer support. Additionally, these bots provide clients with an AI smart assistant and aid them in swiftly accessing the required information.
- Moreover, in January 2023, Amazon Web Services (AWS Conversational AI Competency Partners implemented high-quality chatbot solutions. Enterprises can use Amazon Conversational AI Competency Partners to develop high-quality, highly effective chatbots, virtual assistants, and interactive voice response (IVR) solutions.
- According to a Botco.ai survey in the United States in October 2022, 57 percent of B2B marketers employed chatbots in their demand generation campaigns to better understand their audience. Another 55% stated that they performed to create new leads. Another 43 percent of US marketers stated chatbots assisted them in educating prospects.
To understand key trends, Download Sample Report
Asia Pacific is Expected to be the Fastest Growing Market
- The primary driver for the growth of the Asia-Pacific geographic segment is the significant presence of technology providers and the increasing usage of advanced technology-enabled bot solutions across major industries. These players in the region are focusing on developing innovative solutions to stay in the competitive market landscape.
- The region is witnessing rapid industrialization, raising the need for chatbots in the market under consideration. The growing retail and e-commerce sector in emerging economies, including China, India, Indonesia, Vietnam, Malaysia, the Philippines, Taiwan, and Thailand, has accelerated the high demand for and widespread adoption of chatbots by retailers and e-commerce business owners.
- The Asian-Pacific conversational systems market during the COVID-19 pandemic experienced steady growth. Due to increased COVID-19-infected patients in the region and the lockdown announced by the government of significant economies in the area, the deployments of chatbots by various organizations to handle the patients' queries related to their medication and consultation with doctors online from a remote location increased.
- Owing to the increased technological need, the region is witnessing the emergence of medium and large enterprises to help provide a better customer experience. In June 2022, Tanla, one of the global CPaaS suppliers, and Kore.ai, one of the world's largest enterprise conversational AI software platform and solutions firms, announced an agreement in four Asian countries India, Indonesia, Vietnam, the Philippines, and UAE. This collaboration represents a significant step forward in providing enterprises and brands with the ability to improve the digital experiences of their key stakeholder's customers, partners, and employees, using a advanced conversational artificial intelligence (AI) based natural language processing (NLP) system.
To understand geography trends, Download Sample Report
Conversational Systems Industry Overview
The conversational systems market is highly fragmented with the presence of major players like IBM Corporation, Microsoft Corporation, Google LLC (Alphabet Inc.), Amazon Web Services, Inc., and Nuance Communications Inc. Players in the market are adopting strategies such as partnerships and acquisitions to enhance their offerings and gain sustainable competitive advantage.
In December 2022, TTEC Holdings, Inc., one of the largest global customer experience (CX) technology and services innovators for end-to-end digital CX solutions, announced that VoiceFoundry, a TTEC Digital company, has earned the Amazon Web Services (AWS) Conversational Artificial Intelligence (AI) Competency. This award highlights VoiceFoundry's competence in creating high-quality, high-performance chatbots, virtual assistants, and interactive voice response (IVR) systems.
In October 2022, IBM expanded its embeddable AI software portfolio by releasing three new libraries designed to let IBM Ecosystem partners, customers, and developers build and market their AI-powered products more easily, rapidly, and cost-effectively. The AI libraries, now generally available, were developed in IBM Research and were designed to provide independent software vendors (ISVs) across industries with an easily scalable way to build natural language processing, speech-to-text, and text-to-speech capabilities into applications across any hybrid, multi-cloud environment.
Conversational Systems Market Leaders
Google LLC (Alphabet Inc.)
Amazon Web Services, Inc.
Nuance Communications Inc.
*Disclaimer: Major Players sorted in no particular order
Conversational Systems Market News
- November 2022: Moveworks, a pioneer in corporate conversational AI, partnered with Wipro Ltd, a renowned technology services and consulting firm. Due to the partnership's collaborative solutions, customers may turn their IT departments from cost centers to strategic assets. These collaborative solutions offer a scalable, cost-effective IT solution that enhances operational efficiency and employee happiness.
- May 2022: DRUID, a global leader in conversational artificial intelligence (AI) technology for enterprise productivity, and BARQ Systems, one of the leading regional IT services providers serving business and government clients in the Middle East and Africa (MEA), announced a partnership to accelerate digital transformation and RPA implementations in the region. The combination of the two organizations' team expertise, strengths, and portfolios would provide measurable value to businesses in the public sector, enterprise, finance, insurance, health industry, and services.
Conversational Systems Market Report - Table of Contents
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Bargaining Power of Suppliers
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Impact of COVID-19 on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Rising Usage of AI-based Solutions for Customer Services
5.2 Market Challenges
5.2.1 Accuracy Problems Related to Conversational Platforms
6. MARKET SEGMENTATION
6.1 By Modality Type
6.2 By Type
6.2.1 Voice Assisted
6.2.2 Text Assisted
6.2.3 Other Types
6.3 By Deployment
6.4 By Enterprise Size
6.4.1 Small & Medium Enterprises
6.4.2 Large Enterprises
6.5 By End-user Verticals
6.5.1 IT & Telecommunication
6.5.5 Energy & Power
6.5.6 Other End-User Verticals (Educational Institutions, Travel & Tourism, Transportation & Logistics)
6.6 By Geography
6.6.1 North America
6.6.3 Asia Pacific
6.6.4 Latin America
6.6.5 Middle East and Africa
7. COMPETITIVE INTELLIGENCE
7.1 Company Profiles*
7.1.1 IBM Corporation
7.1.2 Microsoft Corporation
7.1.3 Google LLC (Alphabet Inc.)
7.1.4 Amazon Web Services, Inc.
7.1.5 Nuance Communications Inc.
7.1.6 Drift.com, Inc.
7.1.7 Oracle Corporation
7.1.8 SAP SE
7.1.10 Inbenta Technologies Inc.
8. INVESTMENT ANALYSIS
9. FUTURE OF THE MARKET
Conversational Systems Market Research FAQs
What is the study period of this market?
The Conversational Systems Market is studied from 2018 - 2028.
What is the growth rate of Conversational Systems Market?
The Conversational Systems Market is growing at a CAGR of 15.7% over the next 5 years.
Which region has highest growth rate in Conversational Systems Market?
Asia Pacific is growing at the highest CAGR over 2021 - 2026.
Which region has largest share in Conversational Systems Market?
North America holds highest share in 2022.
Who are the key players in Conversational Systems Market?
IBM Corporation, Microsoft Corporation, Google LLC (Alphabet Inc.), Amazon Web Services, Inc., Nuance Communications Inc. are the major companies operating in Conversational Systems Market.
Conversational Systems Industry Report
Statistics for the 2023 Conversational Systems market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Conversational Systems analysis includes a market forecast outlook to for 2023 to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.