Chatbot Market Size & Share Research by 2027

The chatbot market size is projected to reach US$ 9475.1 million by 2027 from US$ 1072.4 million in 2018; it is expected to witness a significant market growth 27.9% during 2019–2027.

Chatbots are artificial intelligence (AI) systems that engage customers via test, messaging, or speech. The platforms such as Facebook, WhatsApp, Slack, WeChat, or text messages are using chatbots. Some grocery stores use chatbots in cash counters for self-checkout and ordering kiosks at restaurants. This saves not only time but also money. For Instance, Amazon recently opened a store without any cashiers. This will limit human interactions to only those that are necessary. Chatbots help companies reduce the average time to respond, bringing them closer to their customers’ expectations.

The rise in adoption of customer service activities in enterprises to decrease operating costs is expected to drive the growth of chatbot market during the forecast period.

The factors that are contributing to the chatbot market growth include the rise in the need for 24/7 customer support at a low operational cost, a rise in focus on customer engagement through multiple channels and technological advancements, coupled with increasing customer demand for self-service. The chatbot market is expected to witness high growth because of the rise in the demand for enhanced customer experience and building personalized relations with prospects. Various verticals would deploy a diverse array of chatbot services to enable technological transformation initiatives that improve operations, differentiate client viewing experiences, and address mission-critical processes. The operational cost reduction, customer satisfaction, customer query resolution, enhanced visibility into operations and processes, and better real-time decision making are key business and operational priorities expected to increase the chatbot market growth.

Strategic Insights

Chatbot Market Insights

According to the chatbot market analysis, Europe held the largest market share in 2020.

In APAC, there are various startups investing and contributing in chatbot and machine learning technology. Small and medium-sized corporates are steadily integrating chatbots in the customer service process, which provides seamless performance, handles many customers, and develops customer engagement techniques. With the increase in information and technology infrastructures in developed and developing economies, such as India, Australia, Japan, and China in the region, the chatbot market is expected to rise further. The rise in the adoption of smartphones and massive population in APAC are creating a promising customer pool for the chatbot market, according to the market analysis.

Chatbot Market Analysis – Segmental Overview

The chatbot market is segmented on the basis of component, deployment, usage, and end user. Based on component, the chatbot market is segmented into solutions and services. Based on deployment, the chatbot market is categorized into on-premise and cloud. By usage, the chatbot market is segmented into website, contact centers, social media, mobile platform. On the basis of end user, the chatbot market is divided into education, retail & e-commerce, BFSI, healthcare, travel & tourism, and others. On the basis of geography, the chatbot market size is primarily segregated into North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South & Central America.

Deployment-Based Market Insights

On the basis of deployment, the chatbot market is segmented into the cloud and on-premise. The cloud segment of deployment is expected to lead the chatbot market during the forecast period. The segmental rise is majorly driven by the increase in investment from the prominent players for the development of bot technology that is based on cognitive & AI systems. The cloud-based chatbots handle various confidential business information such as employees’ social security numbers, client contact details, accounting & invoices, supply chain management, and other business-related data. Further, the increasing trend of cloud-based natural language intelligent bots, including Alexa, Google Assistant, and Siri, is likely to drive the growth of the chatbots market during the forecast period.

The on-premise segment is expected to rise with decent CAGR during the upcoming years. SMEs prefer affordable solutions by implementing on-premise solutions in their business which would be beneficial for the growth of the chatbot market. The on-premises services provide organizations to automate the process of their business while assisting in recommending solutions to users. Virtual assistants are rising due to machine learning, deep neural networks, and other technological advancements in artificial intelligence. Chatbots and smart speakers are used in multiple applications across various end-user industries, such as BFSI, retail, healthcare, and Travel & Tourism, etc. Chatbot platform helps reduce dependency on vendors by providing sufficient space for customization along with monitoring data access and usage closely.

Players operating in the chatbot market are mainly focused on the development of advanced and efficient products. Chatbot market companies are implementing various strategies to match the technological advancements in the market. Amazon Web Services; Artificial Solutions; Creative Virtual Pvt. Ltd.; CX Company; eGain Corporation; IBM Corporation; INBENTA TECHNOLOGIES INC; Microsoft; Nuance Communications, Inc.; and Verint Systems Inc. are a few chatbot market-leading players.

• In 2021, IBM Corporation announced that it is creating AI-powered chatbots in collaboration with UNSW Business School that would solve a real-world problem for the markets.

• In 2021, Microsoft Corporation filed a patent which increased the intriguing possibility of technologically reincarnating people as a chatbot. Chatbots will use conversations and materials from a large sample of users.