Chatbot Market Size
|Market Size (2023)||USD 5.86 Billion|
|Market Size (2028)||USD 21.08 Billion|
|CAGR (2023 - 2028)||29.18 %|
|Fastest Growing Market||Asia Pacific|
|Largest Market||North America|
*Disclaimer: Major Players sorted in no particular order
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Chatbot Market Analysis
The Global Chatbot Market size is estimated at USD 5.86 billion in 2023, and is expected to reach USD 21.08 billion by 2028, growing at a CAGR of 29.18% during the forecast period (2023-2028).
The chatbot market is witnessing growth due to increasing demand for messenger applications and the growing adoption of consumer analytics by various businesses globally. Vendors globally are making significant product innovations by integrating technologies such as AI and NLP to cater to customer needs and market requirements.
- Chatbots are software applications that utilize artificial intelligence and natural language processing to understand human needs and guide them to the desired outcome with as minimal work by the end user as possible. They act as virtual assistants for customer experience touchpoints. Bots not only interpret the user intent but also process their requests and give prompt relevant answers.
- The market is primarily driven by the rising domination of messenger applications and increasing demand for customer analytics.
- Due to the increasing use of messenger applications, integration of chatbots with messengers yield a higher return on investment as approaching the customers on their preferred application improves user experience. Moreover, messenger applications allow chatbots to save the user's chat history for future purposes to personalize the user experience and gain actionable insights.
- The messaging app usage statistics of January 2022 released by Hootsuite show that WhatsApp has 2,000 million active monthly users, followed by WeChat with 1,263 million monthly active users, followed by Facebook Messenger with 998 million Monthly active users. Chatbots with the ability to reasonably mimic humans allow brands to engage consumers more efficiently on these growing messaging platforms.
- With the outbreak of COVID-19, chatbots have been increasingly deployed by various organizations to respond to customer queries and other related information. As different organizations adopted remote working due to the lockdowns imposed, companies became heavily dependent on chatbots to reduce the burden of customer queries due to the minimal availability of customer service employees.
- Marketing and sales teams are often under pressure to gain sales and constantly improve the customer experience. In contrast to traditional customer service, chatbots are available around the clock, even when sales personnel fail to attend to customer queries. Chatbots help support customers without interruption of working hour limitations. Moreover, bots can easily handle a high number of requests and process them all simultaneously without ever being overworked. Thus, the availability of correct information without waiting helps enterprises boost consumer experience using chatbots.
Chatbot Industry Segmentation
The chatbot market is defined based on the revenues generated by solutions sold by various global market players. The analysis is based on the market insights captured through secondary research and primary. The market also covers the major factors impacting the market's growth in terms of drivers and restraints.
The chatbot market is segmented by end-user vertical (BFSI, healthcare, IT and telecommunication, retail, and travel and hospitality) 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 (USD million) for all the above segments.
|By End-user Vertical|
|IT and Telecommunication|
|Travel and Hospitality|
|Other End-user Verticals|
|Middle East and Africa|
Chatbot Market Trends
Retail to Have Significant Growth
- The applications of chatbots in the retail industry mainly include generating leads, supporting in-store purchases, sending mobile alerts and updates, and providing instant service.
- During an online shopping interaction, the chatbot can present a variety of product selections based on the customer's preferences, such as price range, features, and other users' rankings and comments. Retailers may enhance income by integrating recommendation algorithms into chatbots, and users can discover products that match their preferences.
- Customers may wish to see or try on a product they saw on the website. The user can use the chatbot to find nearby stores and learn about their opening hours. Customers can also use the chatbot to select their desired product, provide their address and contact information, and place orders. Additionally, the chatbot can provide information on upcoming products related to the customer's intent, allowing them to place pre-orders for such products before they go on sale.
- North American countries like the United States are witnessing significant adoption of chatbots in retail. For instance, in March 2023, a US-based retail firm that operates grocery delivery and pick-up services, Instacart, added OpenAI's ChatGPT technology to its grocery delivery app. Instacart has become the latest of a growing list of companies, including Facebook and Snapchat, that choose the AI language tool to boost customer services, improve customer experience, and fasten their marketing and automated tasks.
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Asia-Pacific is Expected to Witness Significant Growth Rates
- Asia-Pacific is witnessing a significant increase in industrialization, increasing the need for chatbots in the market. The increasing retail and e-commerce business in emerging economies, such as China, India, Indonesia, Vietnam, Malaysia, the Philippines, and Thailand, accelerated the high demand and significant adoption of chatbots by retailers and e-commerce business owners.
- The Asia-Pacific chatbot market experienced high growth during the COVID-19 pandemic. Due to the increased number of COVID-19-infected patients in the region and the lockdown announced by the government of significant economies in the region, the deployments of chatbots increased by various organizations to handle patients' queries related to their medication and consultation with doctors online from remote locations.
- Chatbots are being transformed with conversational experiences that deliver immediate, personalized experiences using automated and manual solutions across various messaging channels. The region is witnessing investments in the market studied to provide seamless solutions to its customers.
- There is a significant growth in the usage of messaging services, which is further anticipated to exceed social networking sites in terms of the number of users. A significant development in natural language processing simplifies the interactions between computer and human languages. Factors such as these are likely to drive the market during the forecast period.
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Chatbot Industry Overview
The chatbot market is highly competitive, owing to the presence of many small and large players. This fragmentation is due to the relative ease of developing chatbot applications using open-source frameworks, APIs, and development platforms. As a result, numerous small-scale vendors have entered the market, contributing to its fragmentation. Some prominent players in the market are IBM Corporation, eGain Corporation, Nuance Communications, Creative Virtual Ltd, and Avaamo Inc.
- April 2023 - Zendesk partnered with OpenAI, a prominent America-based AI research laboratory. The firm would provide its users with AI-supported solutions to simplify ticket-generating activities for CX and customer service employees. Zendesk and OpenAI are working together to improve the capabilities of Zendesk’s foundation models, which are proprietary, by integrating them with OpenAI’s.
- January 2023 - Kore.ai declared that the firm would introduce RetailAssist, a conversational sales assistant solution for the retail sector, at the National Federation of Retailers exhibition (NRF 2023) in New York City. RetailAssist helps retail and e-commerce businesses modernize, scale, and transform operations by developing expertise in self-service automation, customization, omnichannel fulfillment, and 24/7 pre-/post-sales service and support.
Chatbot Market Leaders
Creative Virtual Ltd
Nuance Communications Inc (Microsoft Corp)
*Disclaimer: Major Players sorted in no particular order
Chatbot Market News
- April 2023 - Kore.ai disclosed that the firm had integrated its conversational AgentAssist with automated intelligent virtual assistant (IVA) support for Zendesk Inc. Through an everyday user experience, this AI virtual assistant for contact center employees manages the generation and sales processes, extending the capabilities of Zendesk Support across digital channels.
- March 2023 - Nuance launched the Nuance Mix Answers with GPT-powered functionality for its call center AI solutions. As a component of the Microsoft Digital Contact Centre Platform, the solution would complement the capabilities of Microsoft's low-code bot-building platform, Power Virtual Agents, and collaborate with recent GPT enhancements to give clients choices to suit their needs.
Chatbot 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 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Buyers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitutes
4.2.5 Intensity of Competitive Rivalry
4.3 Industry Value Chain Analysis
4.4 Assessment of the Impact of COVID-19 on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Rising Domination of Messenger Applications
5.1.2 Increasing Demand for Consumer Analytics
5.2 Market Restraints
5.2.1 Integration Complexities and Data Concerns
6. MARKET SEGMENTATION
6.1 By End-user Vertical
6.1.3 IT and Telecommunication
6.1.5 Travel and Hospitality
6.1.6 Other End-user Verticals
6.2 By Geography
6.2.1 North America
6.2.4 Latin America
6.2.5 Middle East and Africa
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 IBM Corporation
7.1.2 Egain Corporation
7.1.3 Nuance Communications Inc. (Microsoft Corp.)
7.1.4 Creative Virtual Ltd
7.1.5 Avaamo Inc.
7.1.6 EdgeVerve Systems Limited
7.1.7 Zendesk Inc.
7.1.8 Inbenta Holdings Inc.
7.1.9 Serviceaide Inc.
7.1.10 Amelia US LLC (Ipsoft Inc.)
7.1.11 Kore.ai Inc.
7.1.12 AWS Inc. (Amazon.com Inc.)
7.1.13 7.ai Inc.
7.1.14 Artificial Solutions International AB
7.1.15 Dialogflow (Google)
7.1.16 LiveChat Inc.
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. MARKET OPPORTUNITIES AND FUTURE TRENDS
Chatbot Market Research FAQs
How big is the Chatbot Market?
The Chatbot Market size is expected to reach USD 5.86 billion in 2023 and grow at a CAGR of 29.18% to reach USD 21.08 billion by 2028.
What is the current Chatbot Market size?
In 2023, the Chatbot Market size is expected to reach USD 5.86 billion.
Who are the key players in Chatbot Market?
IBM Corporation, Creative Virtual Ltd, Avaamo Inc., Egain Corporation and Nuance Communications Inc (Microsoft Corp) are the major companies operating in the Chatbot Market.
Which is the fastest growing region in Chatbot Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2023-2028).
Which region has the biggest share in Chatbot Market?
In 2023, the North America accounts for the largest market share in the Chatbot Market.
Chatbot Industry Report
Statistics for the 2023 Chatbot market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Chatbot analysis includes a market forecast outlook to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.