Market Insight- Global chatbot Market
A chatbot is a type of software designed to interact with humans via textual or auditory conversations, typically over internet. The software facilitates the conversation between humans and machines using artificial intelligence. The chatbot software is programmed to allow users and businesses to interact through medium such as video, text, voice, file sharing, and image. Digital platforms such as mobile, websites, and standalone devices are used for adoption of chatbots. Furthermore, OTT messaging apps are providing opportunities for businesses and consumers. Businesses are increasingly adopting platform-based approach that allows communication apps to be used for multiple purposes including gaming, payment, and advertisement. For instance, Facebook offers its messenger app to allow businesses to provide self service to customers and also enabled businesses to perform various functions such as sending shipping details, promotional offers, and their brand representatives to conduct conversations with customers.
The global chatbot market was valued US$ 274.5 Mn in 2019 and expected to reach US$ 2,020.2Mn by 2027.
Market Dynamics- Drivers
- Increasing use of advertisements in artificial intelligence is expected to drive growth of the global chatbot market during the forecast period
Technological advancements in artificial intelligence followed by penetration of messaging apps have boosted the demand for chatbots in the recent past. Majority of companies are leveraging new and innovative technologies to further their reach with consumers. Marketing activities such as mobile analytics, cloud platforms, and social analytics have helped to transform various enterprises into a global digital business. Moreover, a number of publishers and brands have started deploying bots on messaging and collaboration channels such as CNN, HP, and 1-800 Flowers. Thus, these factors are expected to drive the market growth during the forecast period.
- Growing need to provide effective and immediate customer support is expected to propel the global chatbot market growth over the forecast period
Chatbots have become the prime solutions to the emerging challenge of providing immediate and effective customer support to the customers regardless of their location. This allows organizations to keep business hours out of the equation and aids consumers to reach out to the best customer support available to settle all their queries. Moreover, chatbots are fairly efficient at mimicking human conversation, thus many organizations use them to enhance their live chat customer service channel. Therefore, these factors are expected to propel the global chatbot market growth over the forecast period.
North America region dominated the global chatbot market in 2019, accounting for 48.3% share in terms of value, followed by Asia Pacific, Europe, Latin America and Middle East respectively.
Source: Coherent Market Insights
Market Dynamics- Restraints
- Inability to recognize customer intent and respond quickly is expected to hinder the global chatbot market growth during the forecast period
Although chatbots have been evolved over the years, many times chatbots fail to understand customer intent. Software tools such as application program interfaces are developed to perform the standard use of chatbot solutions without integrating any specific functionality, hence they often fail to meet specific requirements. Chatbots available in the market can assist customers if they are posed with questions they are designed to answer. Hence, when customers ask question specific that chatbot has no information about, it fails to understand the customer’s intent. These factors are expected to hinder the global chatbot market growth over the forecast period.
- Lack of awareness regarding benefits of chatbots is expected to restrain growth of the global chatbot market over the forecast period
Chatbots have gained significant traction in enterprise from developed countries such as the U.S., Canada, and Western European countries. However, many business owners from emerging economies such as India, China, Brazil, Chile, and South Africa remain unacquainted with this novel technology. Furthermore, high initial funding required for installation of chatbot, which is unaffordable for many small- and mid-sized enterprises from emerging economies, is expected to restrain growth of the global chatbot market during the forecast period.
- Incorporation of natural language processing and natural language understanding can provide growth opportunities
Natural language processing (NLP) and natural language understanding (NLU) is the basis of new bot technologies. Various technology giants such as Google, Inc., Amazon, Microsoft Corporation, and Facebook are aggressively competing in the market, thus there are plenty of growth opportunities emerging in the market in terms of simplifying the experience of authoring and processing conversations and integrating them with bot frameworks.
- Chatbot analytics is expected to present significant growth opportunities in the near future
Performance monitoring and analytics are some of the key regions of opportunities for market players. New user interface models for chatbots are based on simple user interface constructs and conversations that require new form of analytics and monitoring. For instance, a chatbot analytics platform should be able to track the sentences developed in current user interactions, analyze concepts and sentiments, and determine error processing rates.
Source: Coherent Market Insights
- Increasing number of companies providing information and other services via messaging bots
There is emerging trend of various companies providing numerous services and information via messaging bots. In the near future, Facebook Inc. is expected to introduce various software and tools for its Messenger chat service. In the recent past, the company already signed a partnership with a few transportation companies and online retailers to check the status of a clothing purchase from online retailers such as Flipkart, boarding passes from airlines, and service from Uber.
- Improved customer intelligence using AI-based chatbots
Enhanced customer intelligence/engagement with the help of AI-based chatbots is major rising trend in the market. With the use of conversational interface, many organizations are enabling people to interact with businesses in a conversational format without inclusion of different platforms or applications. Moreover, chatbots make the entire experience engaging by utilizing NLP as chatbots are programed to respond users with something more than plain text such as image with tappable options. Chatbots can also leverage machine learning to quickly understand a customers’ preference, solve problems and improve reach.
In global chatbot market, by platform segment, the mobile, sub-segment dominated the global market in 2019, accounting for 43.9% share in terms of value, followed by Web- based and Standalone respectively.
Source: Coherent Market Insights
Key companies operating in the global chatbots market are Facebook, Inc., Kiwi, Inc., Astute Solutions, Google, Inc., Pandorabots, Inc., Haptik, Inc., Yahoo Inc., Helpshift, ToyTalk (PullString Inc.), Imperson Ltd. Slack Technologies, Inc., Kasisto Inc., and Microsoft Corporation.
- Key companies in the market are focused on mergers and acquisitions, in order to gain competitive edge in the market. For instance, in September 2019, Facebook, Inc. acquired Servicefriend, a provider of hybrid chatbots for Calibra customer service.
- Major market players are involved in mergers and acquisitions, in order to enhance their market presence. For instance, in September 2019, Haptik Inc. acquired ecommerce chatbot Buzzo.ai