Global Chatbot Market Analysis Report

Market Insights

The chatbot market is estimated to grow from USD 5.27 billion in 2023 and is likely to grow at a CAGR of 23.28% during 2023-2028 to reach USD 14.95 billion by 2028.

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What is a chatbot?

A chatbot is a type of interactive application that is created using a set of rules or artificial intelligence technology. It is intended to interact with humans via textual conversation and is integrated with various messaging services, thereby assisting users in a variety of industries. Various advancements in Artificial Intelligence (AI) and Machine Learning (ML) technologies are expected to improve the features of chatbots, driving demand.

Key Players

The following are the key players operating in the market-

• Aivo (Argentina)
• Microsoft (US)
• Google (US)
• AWS (US)
• Nuance (US)
• Oracle (US)
• Creative Virtual (UK)
• Artificial Solutions (Spain)
• Kore.ai (US)
• Inbenta (US)
• [24]7.AI (US)
• ServiceNow (US)
• Conversica (US)
• Personetics (US)
• LiveChat (Poland)
• IBM (US)

Some major development strategies adopted by key players in the industry in recent years, which significantly influenced the competitive dynamics. For example:

• 03, 2023 - Nuance Healthcare launches Dragon Ambient eXperience Express in the US, offering AI-powered automated clinical documentation. The OpenAI-powered app transcribes patient notes, automating workflows and reducing administrative burdens for clinicians.
• On 13 July 2023, Google's AI chatbot Bard will expand to Europe, competing with ChatGPT, which uses generative AI for user conversations. Companies are investing billions in AI to generate advertising and cloud revenue. Elon Musk's xAI, a startup with former Google, Microsoft, and OpenAI engineers, is also gaining attention.
• On 9 August 2023, Inbenta, an AI platform in Allen, introduced generative AI integration for content development and organization, enabling instant organization with minimal effort oversight and compliance.
• On 14 July 2023, ServiceNow introduced Now Assist for Virtual Agent, combining chatbots with Generative AI for conversational, self-service user experiences. This solution simplifies complex workflows and leverages the enterprise's enterprise value of Generative AI.

Market Dynamics

The chatbot market is driven by a host of factors, some of which are noted below:

• Increase in the need for 24/7 customer support at a lower operational cost.
• Increased focus on customer engagement through various channels, and technological advancements.
• Rising customer demand for self-service operations, which provides businesses with a competitive advantage.
• Initiatives to create self-learning chatbots that provide a more human-like conversational experience.
• Self-learning chatbots can adapt to changing environmental conditions and learn from their actions, experiences, and decisions.

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• In the future, there will be a notable surge in market demand for chatbots designed to be seamlessly integrated with messaging applications.
• Businesses are increasingly adopting chatbot technology to automate sales and customer services, leading to a rise in their popularity.
• By leveraging chatbots, organizations can deliver prompt services while also reducing operational costs.
• Amidst the COVID-19 pandemic, numerous marketing agencies, financial organizations, and grocery outlets have embraced the complete integration of chatbots and conversational AI tools to bolster their customer service capabilities during this crisis.
• Faced with challenges in sustaining their businesses, these companies are actively exploring novel technological solutions, including voice-based assistants and chatbots, to adapt and enhance their operations.

Open.AI, a prominent American artificial intelligence company, introduced ChatGPT, an advanced AI chatbot capable of answering a wide array of questions. ChatGPT is the latest iteration in the GPT series of AI models. This chatbot's innovative design empowers it to handle follow-up questions, acknowledge errors, challenge false assumptions, and politely decline inappropriate requests.

Opportunities:

• Assistance in customer service: Chatbots provide customer service for a variety of activities, freeing up humans to concentrate on more difficult ones like processing orders and responding to inquiries.
• Assistance in sales and marketing: Chatbots generate leads, qualify prospects, close deals, provide product information, and answer customer questions.
• Assistance in education and training: Chatbots offer educational content, training, and support to employees and students, addressing questions and providing answers.
• Assistance in healthcare: Chatbots offer healthcare information, support, monitoring, appointment reminders, and medication reminders to patients, enhancing their overall health experience.

Challenges:

• Accuracy: Chatbots must accurately understand and respond to user queries due to ambiguous natural language interpretations, making it a challenge.
• Personalization: Chatbots must personalize interactions with users, which requires understanding their needs and preferences, which can be challenging.
• Security: Chatbots must be secure to access sensitive information, authenticate users, and protect data, posing challenges in authentication and data protection.

Segmentation

This report studies the chatbot market covering a period of 11 years of trend and forecast. The report provides detailed insights into the market dynamics to enable informed business decision-making and growth strategy formulation based on the opportunities present in the market.

The market is segmented into the following categories:

By Product Type:

• Artificial intelligence
• Marketing
• Human intelligence

By Type:

• Standalone
• Web-based
• Messenger-based/Third part

By Deployment Mode Type:

• On-premise
• Cloud

By End-use Type:

• Healthcare
• Retail
• Banking
• Financial Services
• Insurance (BFSI)
• Media and entertainment
• Travel & Tourism
• E-commerce

By Region

• North America (Country Analysis: The USA, Canada, and Mexico)
• Europe (Country Analysis: Germany, France, The UK, Russia, Norway, and Rest of Europe)
• Asia-Pacific (Country Analysis: China, India, Japan, Australia, Indonesia, and Rest of Asia-Pacific)
• Rest of the World (Country Analysis: Saudi Arabia, Brazil, and Others).

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Segment Analysis

Type

The market has been classified into Standalone, Web-based, Messenger-based/Third party. Under these, the Standalone segment held a significant market share of more than 50% in 2022  & It is anticipated that the segment will experience significant growth during the forecast period.

The standalone chatbot segment refers to chatbots that are independent of any specific platform or channel and can be accessed through a variety of channels such as websites, messaging apps, and voice assistants. standalone chatbots were a popular choice for businesses looking to implement chatbot solutions, due to their flexibility and versatility.

Product Trends

The market has been classified into Artificial intelligence, Marketing, and Human intelligence. Under these, the Marketing segment held a significant market share of more than 55.0% in 2022 and is projected to grow at a robust CAGR in the coming years.

Chatbots had become increasingly popular in the marketing industry due to their ability to provide personalized and timely responses to customers, improve engagement, and reduce costs.

End-use Trends

The market has been classified into Healthcare, Retail, Banking, Financial Services, and Insurance (BFSI), Media and entertainment, Travel & Tourism, E-commerce, and Others. The E-commerce segment accounted for the largest market share of more than 20% in 2022 & is expected to remain the most dominant as well as the fastest-growing segment during the forecast period.

Cloud computing has transformed the way businesses operate. Chatbots are gaining popularity in a variety of industries due to benefits such as remote connectivity and virtual presence, which significantly reduce transportation costs.

Regional Analysis

The North American market held the highest market share of more than 40.0% in 2022 and is projected to grow at a healthy CAGR during the forecast period. 

The growth in North America is being driven by factors such as the increasing adoption of chatbots by businesses to improve customer engagement, the rise of social media and messaging platforms as communication channels, and the growing demand for 24/7 customer support services. Overall, the chatbot market in North America is expected to continue growing in the coming years, driven by the increasing adoption of artificial intelligence and natural language processing technologies and the growing demand for personalized and efficient customer service.

Report Features

This report provides intelligence in the most comprehensive way. The report structure has been kept such that it offers maximum business value. It provides critical insights into the dynamics and will enable strategic decision-making for the existing players as well as those willing to enter the market.

What Deliverables Will You Get in this Report?

Research Methodology

This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with Stratview Research’s internal database and statistical tools.

More than 1,000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles have been leveraged to gather the data.

We conducted more than 10 detailed primary interviews with companies across the value chain in all four regions and with industry experts to obtain both qualitative and quantitative insights.

Target Audience

The target audience of the chatbot market includes-

• Companies
• Distributors
• Healthcare Industry
• Travel & Tourism

COVID-19 Impact Analysis

The lockdown is expected to cause a minor slowdown in the market in 2020. The COVID-19 pandemic has increased churn and shaken nearly every industry. The lockdown is having a negative impact on manufacturing, supply chains, and logistics, as well as the continuity of operations in various sectors.

Manufacturing, transportation and logistics, and retail and consumer goods face the most challenges. The availability of essential items is hampered by a lack of manpower to work on production lines, supply chains, and transportation, despite the fact that essential items are exempt from the lockdown.

Report Customization

With this detailed report, Stratview Research offers one of the following free customization options to our respectable clients:

Company Profiling

• Detailed profiling of additional market players (up to 3 players)
• SWOT analysis of key players (up to 3 players)

Competitive Benchmarking

• Benchmarking of key players on the following parameters: Technology portfolio, geographical reach, regional presence, and strategic alliances

Custom Research: Stratview Research offers custom research services across sectors. In case of any custom research requirement related to market assessment, competitive benchmarking, sourcing and procurement, target screening, and others, please send your inquiry to sales@stratviewresearch.com.