Global ChatBot Market By Type (Standalone, Web-based, and Messenger-based/Third party), By Application (Healthcare, Retail, Banking, Financial Services, and Insurance (BFSI), Media and entertainment, Travel & Tourism, and E-commerce), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032
- Published date: Dec. 2023
- Report ID: 60914
- Number of Pages: 337
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Report Overview
The Global Chatbot Market Size Recorded Sales of USD 6 Billion in 2023. The Market experienced a CAGR of 23.9% Year-on-year growth. It is anticipated to achieve revenues of USD 42 Billion by 2032.
Chatbots are interactive applications that can be used to communicate with users using either artificial intelligence or a set of rules. It can interact with people through textual conversation and integrates with different messaging services to assist users in various industries. Various innovations in artificial intelligence and machine-learning technologies will enhance chatbot. This will drive market growth over the next few years. The market growth is expected to be driven primarily by enterprises’ increasing use of customer service activities to lower operating costs.
Note: Actual Numbers Might Vary In The Final Report
There has been significant growth in this market in the past few years. Product demand has increased due to the increasing demand for customer service, which is now available 24×7. This is due to individuals’ increasing preference for messaging apps over social networking sites. Chatbot designed for integration with messaging apps are expected to be in high demand. Chatbots are also becoming more popular as companies automate customer service and sales.
Chatbots allow organizations to provide timely services at lower costs. The use of messaging services is on the rise and is expected to surpass social networking sites in terms of the number of users. The natural language processing field has significantly improved, making it easier to communicate between computers and humans more efficiently. The chatbot’s entire ecosystem comprises various cross-linking elements that allow for optimal use of the application.
Key Takeaways
- Market Value: In 2022, the global chatbot market size reached sales of USD 5 billion, and it is projected to grow at a CAGR of 23.9%, reaching a staggering USD 42 billion by 2032.
- Market Growth Drivers: The market’s expansion is primarily driven by the increasing use of messaging apps and the rising demand for 24/7 customer service, facilitated by chatbot applications.
- Restraining Factors: The presence of free chatbots with predefined rules is one of the main constraints affecting the market’s growth. Small businesses tend to opt for these free options, hindering the growth of AI-powered chatbots.
- Type Analysis: Standalone chatbots hold the dominant market share of over 55.0%. The trend is expected to continue during the forecast period, with an increasing preference for visual assistants such as Siri and Alexa.
- Application Analysis: Service segment bots have a market share of more than 35.0%. Bots for social media and order processing are expected to see significant growth, with automation being a prevailing trend.
- Regional Analysis: North America accounted for the highest revenue share at over 40.0% in 2022. The Asia Pacific region, a major hub for service industries, follows closely. The market’s substantial benefits, including reduced operating costs and improved customer satisfaction, explain the potential for significant growth in various regions.
- Growth Opportunity: Chatbot developers have the opportunity to integrate payment gateways directly with their assistants, enabling them to provide payment services via messaging platforms, thereby earning commissions for minimal fees.
- Latest Trends: Chatbots are gaining popularity due to their 24/7 availability, improved response capacity, increased return on investment, and simplified procedures for recurrent queries. Technological advancements in chatbots, such as natural language processing, cloud-based deployments, and multichannel integration, are also opening up lucrative market opportunities.
- Leading Market Players: Some of the top players in the market include Acuvate, Aivo, Artificial Solutions, Botsify Inc., Creative Virtual Ltd., eGain Corporation, IBM Corporation, Inbenta Technologies Inc., Next IT Corp., and Nuance Communications, Inc., among others.
- Forecasted Revenue: The report projects that the market will see a significant growth trajectory, reaching USD 42 billion by 2032, with a substantial CAGR of 23.9%.
Chatbots are used to interact with customers via websites, mobile apps, and SMS. Chatbots can be deployed with various channels, including standalone websites or third-party messaging platforms. To assist customers, the chatbot is often integrated into enterprises’ websites. Chatbots can also be deployed on third-party messaging platforms like Facebook, Skype or WeChat. Chatbots are used to communicate with users to report complaints or requests to customer service. Chatbots are messaging service that is developed using artificial intelligence and a set of rules. They can interact via a chat interface.
There are two types: one that is built from a set of rules and another that uses artificial intelligence and machine-learning algorithms. Chatbots can also be equipped with voice recognition to provide enhanced customer service. These chatbots can be built on a variety of chatbot development frameworks, such as wit.ai and motions.ai. These chatbots can be integrated with other applications and include cloud backup and various database integrations, and are also included with cloud backup. Chatbot developers integrate analytics into their software applications to gain better insight into customer buying habits and behavior.
Driving Factors
An Increase in the messaging app is driving the growth of the market.
Rapid growth is being experienced in over-the-top, which is also called as OTT. Applications like WhatsApp and Facebook Messenger are experiencing rapid expansion. This growth is expected because people are more interested in messaging apps than social networking sites.
These messaging apps will see a lot of demand for chatbots. Application-to-person automated messages are expected to grow significantly, as they can automate the task with a click of a message to book hospital appointments, check flight status, place orders for eCommerce sites, and locate the best deals.
Automated customer service is more popular than IVR or email services for most companies because it offers immediate solutions. Machine learning and artificial intelligence will drive future demand for chatbots. These are the main factors driving the growth of the global chatbot market size.
Restraining Factors
The Availability of Free Chatbots in the Market is The Main Restraints of the Market.
There are many free predefined chatbots with specific rules that you can use to create a free chatbot are available in the market. Some of the main key players, such as chattypeople, MEOKAY, etc., can help you create chatbots without any coding.
Therefore, small businesses that do not need to solve complex problems prefer deploying chatbots with AI and natural language processing-powered chatbots. These are the main restraints that are affecting the growth of the chatbot market size.
Type Analysis
With a market share of more than 55.0%, the standalone segment is the dominant player. It is expected to continue its dominance during the forecast period. Consumers are increasingly using visual assistants such as Siri, Amazon’s Alexa, and Google Assistant to create standalone messaging platforms. This will lead to a significant increase in demand for standalone chatbots.
Chatbots are becoming increasingly popular in enterprises to communicate with customers via messaging platforms. Chatbots allow enterprises to interact directly with customers and to provide data about customer preferences that can be used later in digital marketing activities. Chatbots are being used by major enterprises in digital marketing, retail, healthcare, and many other areas to improve consumer services.
Application Analysis
The bots for the service segment dominate the market with a market share of more than 35.0%. In terms of a number of bots, the bots for social media dominated the market. The bots dominated the market share for revenue in the service segment. During the forecast period, large market shares will be held by bots for order processing and bots to manage marketing. Automation was the prevailing trend in this period.
Many businesses have begun automating mundane and routine tasks to cut costs. Chatbots can be used to reduce costs in the customer service and sales sectors significantly. Chatbots that use artificial intelligence are gaining popularity. Chatbots can be used in businesses to reduce labor costs drastically. This will automate some customer service and sales and lead to significant savings for businesses.
Customers prefer quick replies from customer service rather than waiting for days to receive a response. Chatbots can reduce the chance of losing customers. E-commerce companies can use chatbots for exchanges and returns. The deployment of chatbots will automate around 35% of tasks, which will result in significant annual cost savings.
Note: Actual Numbers Might Vary In The Final Report
Key Market Segment
Based on Type
- Standalone
- Web-based
- Messenger-based/Third party
Based on Application
- Healthcare, Retail
- Banking
- Financial Services
- Insurance (BFSI)
- Media and entertainment
- Travel & Tourism
- E-commerce
Growth Opportunity
Chatbots use artificial intelligence (AI) to interpret human language and have conversations with people. Chatbots are available for many social networking sites, including Facebook, Skype, Slack, and Slack. Chatbot developers can integrate payment gateways directly with their assistants, allowing them to use messaging platforms to offer payment services. The possibility to earn commissions for minimal fees is one of the most promising growth opportunities in the chatbot market.
Latest Trends
Chatbots offer more benefits than traditional customer service solutions, And Technological Advancement in Chatbots. Chatbots are becoming more popular as consumers become more aware of their benefits, including 24/7 availability, greater response capacity, increased return-on-investment (ROI), and simplified procedures for recurrent queries.
Chatbots have significant benefits for the BFSI sector, including a higher net promoter score (NPS), a greater consumer convenience in product offerings and shorter response times. These benefits have driven the growth of BFSI chatbots. Chatbot software with advanced technical characteristics such as a natural language processing (NLP), interference engines, cloud-based deployments, application programming interfaces (API) and multichannel will open up lucrative market opportunities.
It is also expected that there will be an increase in demand for chatbots using audio speech in the coming years. This is why it is expected that chatbots using audio speech will be a key component of the BFSI chatbots market.
Regional Analysis
In 2022, North America was the country with the highest revenue share at over 40.0%. Asia Pacific, a major hub in the services industry, is next. Chatbots are becoming more popular in customer service operations at large companies. Chatbots have a huge potential to grow in many regions due to their significant benefits to businesses, including reduced operating costs, customer satisfaction, and improved operating efficiency.
The significant benefits of the market, such as reducing operating costs, customer satisfaction, and increasing the efficiency of enterprises, explain this market’s substantial growth potential. North America has the highest revenue share, as it is home to the largest number of chatbot startups. The majority of chatbot implementations took place in North America.
Note: Actual Numbers Might Vary In The Final Report
Key Regions and Countries Covered in this Report:
- North America
- The US
- Canada
- Europe
- Germany
- France
- The UK
- Spain
- Italy
- Russia
- Netherland
- Rest of Europe
- APAC
- China
- Japan
- South Korea
- India
- Australia
- New Zealand
- Singapore
- Thailand
- Vietnam
- Rest of APAC
- Latin America
- Brazil
- Mexico
- Rest of Latin America
- Middle East and Africa
- South Africa
- Saudi Arabia
- UAE
- Rest of MEA
Key Players Analysis
Market players are constantly challenged to offer innovative offerings that address new technologies, business practices, and consumer assistance. Current market conditions are characterized by intense competition among the market leaders for market dominance.
This is achieved through the enhancement of product differentiation and quality, which in turn allows for market consolidation through strategic initiatives like mergers, alliances, and acquisitions. To strengthen their product range and geographic presence, industry participants have formed strategic partnerships with distributors and suppliers.
Top Key Players
- Acuvate
- Aivo
- Artificial Solutions
- Botsify Inc.
- Creative Virtual Ltd.
- eGain Corporation
- IBM Corporation
- Inbenta Technologies Inc.
- Next IT Corp.
- Nuance Communications, Inc.
- Other Key Players
Recent Developments
- September 20, 2022 -eGain Corporation is a leading provider of knowledge automation platforms for customer engagement. They have announced the availability of a prebuilt connector for IBM Watson Assistant. This connector uses eGain’s unique BYOB architecture to allow business users to plug in the Watson Assistant directly into the eGain platform.
- August 20, 22 – Serviceaide Inc. has announced that it is continuing its Latin American momentum. This includes a strong customer base in South America, and an expanded sales presence and support in Mexico. The firm’s ChangeGear ITSM platform launched the Spanish-language version, which is expanding on the existing Luma Virtual Agent Suite and Intelligent Service Management (ISM) . ISM is very popular among partners as it is the foundation for their BPO, ITO and MSP operations.
Report Scope
Report Features Description Market Value (2023) USD 6 Bn Forecast Revenue (2032) USD 42 Bn CAGR (2023-2032) 23.9% Base Year for Estimation 2022 Historic Period 2016-2022 Forecast Period 2023-2032 Report Coverage Revenue Forecast, Market Dynamics, COVID-19 Impact, Competitive Landscape, Recent Developments Segments Covered By Type (Standalone, Web-based, and Messenger-based/Third party), By Application (Healthcare, Retail, Banking, Financial Services, and Insurance (BFSI), Media and entertainment, Travel & Tourism, and E-commerce) Regional Analysis North America – The US & Canada; Europe – Germany, France, The UK, Spain, Italy, Russia, Netherlands, and Rest of Europe; APAC- China, Japan, South Korea, India, Australia, New Zealand, Singapore, Thailand, Vietnam, and Rest of APAC; Latin America- Brazil, Mexico & Rest of Latin America; Middle East & Africa- South Africa, Saudi Arabia, UAE & Rest of MEA Competitive Landscape Acuvate, Aivo, Artificial Solutions, Botsify Inc., Creative Virtual Ltd., eGain Corporation, IBM Corporation, Inbenta Technologies Inc., Next IT Corp., Nuance Communications, Inc. and Other Key Players Customization Scope Customization for segments, region/country-level will be provided. Moreover, additional customization can be done based on the requirements. Purchase Options We have three licenses to opt for Single User License, Multi-User License (Up to 5 Users), Corporate Use License (Unlimited User and Printable PDF) Frequently Asked Questions (FAQ)
What is a chatbot?A chatbot is a computer program designed to simulate conversation with human users, especially over the internet or through messaging applications. It uses natural language processing (NLP) and machine learning (ML) algorithms to understand and respond to user queries.
What are the benefits of using chatbots for businesses?Chatbots can help businesses automate customer service, reduce response times, and provide 24/7 support. They can also be used for lead generation, sales, and marketing. Additionally, chatbots can collect valuable data on customer interactions and behavior, which can be used to improve products and services.
How do chatbots work?Chatbots use NLP and ML algorithms to analyze user input and generate a response. The NLP algorithm is responsible for understanding the intent and context of the user's message, while the ML algorithm is responsible for generating an appropriate response based on the data it has been trained on.
What are some popular chatbot platforms?There are many chatbot platforms available, including Dialogflow, IBM Watson Assistant, Amazon Lex, Microsoft Bot Framework, and many others. These platforms offer pre-built templates, integrations, and tools to help businesses create and deploy chatbots quickly and easily.
Are chatbots replacing human customer service representatives?While chatbots can handle simple queries and tasks, they are not yet advanced enough to replace human customer service representatives entirely. However, they can supplement human support teams and reduce their workload, allowing them to focus on more complex issues and interactions.
What are some ethical considerations for chatbots?As chatbots become more advanced, there are growing concerns about their ethical implications, such as privacy, bias, and the potential for chatbots to deceive users. It's essential for businesses to consider these issues when designing and implementing chatbots and to ensure that they are transparent and ethical in their use.
- Acuvate
- Aivo
- Artificial Solutions
- Botsify Inc.
- Creative Virtual Ltd.
- eGain Corporation
- IBM Corporation
- Inbenta Technologies Inc.
- Next IT Corp.
- Nuance Communications, Inc.
- Other Key Players
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