Chatbot Market expected to grow significantly over 2024
Date: 2018-08-28   Author: Ronak Bora  Category: #market

Chatbot Market expected to grow significantly over 2024

The Chatbot Market is set to grow from its current market value of more than $250 million to over $1.34 billion by 2024; according to a new research report by Global Market Insights, Inc.

Chatbot Market is projected to surpass USD 1.34 billion by 2024. The introduction of chatbot has opened new boundaries into the business world in terms of customer engagement and ease of interaction enabling the countries to connect with their customers globally. Chatbots also allow businesses to interact with their customers in two-way communication. It permits them to examine and measure interactions with consumers, taking their requirements into consideration, and optimizing customer experiences. Chatbots also aid in increasing customer retention rate by sending personalized messages and offering 24/7 availability, accelerating the market demand.

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The technological advancements in the field of AI had benefitted the chatbot industry as they have brought about a change from just being simple software with scripted answers to present day intelligent chatbots that are able to engage potential consumers. These chatbots have brought about various positive social impacts such as enhanced customer interaction with businesses, quick access to public data, and online payment of tax and bills. Moreover, the governmental agencies are also relying on chatbots to enhance customer experience. For instance, the Mississippi Department of Information Technology has been using a chatbot named Missi to resolve inquiries of 100 citizens daily relating to taxes and hunting licenses.

The rule-based segment dominates the chatbot market with a revenue of USD 218 million in 2017 anticipated to reach USD 869 million by 2024. However, the development of these chatbots is done following a rule-based approach and hence are unable to answer questions whose patter mismatches with the rules on which the bot is trained. The AI-based chatbots are projected to grow at the fastest rate of CAGR 52.8% over the forecast timeline. The rapid progresses in the field of NLP and machine-learning have also led to the development of AI-based chatbots which can offer personalized responses. For instance, in 2018, the Indian railways decided to use AI-based chatbots for handling passenger queries. These chatbots assist in improving traveler experience in an efficient manner by providing enhanced passenger safety, amenities, and better service delivery.

The standalone segment held approximately 50% shares in the market in 2017 and is anticipated to dominate the market. They operate on a single computer integrated with the system interface and can control certain functions of the computer such as retrieving documents or playing media. These chatbots offer benefits such as ease of installation and reduced installation prices. The web-based chatbots are growing fast as the chatbot operators are personalizing the content and have control over the personality and behavior of the chatbot, increasing their demand in the market.

The customer service applications show strong interests in chatbots as these intelligent digital assistants are always accessible to solve customer queries in a cheap and efficient manner. They support businesses to save customer service expenses of over 30% by moving up response times and freeing up employees for more challenging work. Furthermore, around 56% of the companies operating in the technology and multimedia sectors are planning to invest in chatbots in the coming three to five years, saving approximately USD 8 billion yearly in customer supporting costs. 

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Most enterprises use on-premise chatbot platforms which allow them to have total control of the chatbot experience and can securely manage and examine all chatbot interactions within the enterprise environment. The cloud model provides built-in services offering easy to configure chatbots. The companies design, develop, and deliver highly intelligent chatbots for use in numerous communication channels, increasing their demand.

The e-commerce segment held about 35% of the market in 2017 because they assist in completing buyer’s purchases, offer product recommendations, and provide customer support in enhancing their market growth. They aid in improving shopping experience by reducing waiting time, provide 24/7 support, and retain customers by sending messages. For instance, Starbucks chatbot available on the Starbucks application allows customers to easily place an order by text messaging or voice commands through chatbots, increasing customer buying experience and saving purchase time.

North America is projected to dominate the chatbot market by 2024 as chatbot solutions have gained prominence in different sectors such as BFSI e-commerce, gaming, and healthcare. Furthermore, the technological advancements in the AI and NLP technologies followed by the increased usage of computers, tablets, laptops, and mobiles are also driving the market growth. Asia Pacific is growing the fastest in the market during the forecast timeline, generating revenues of approximately USD 350 million by 2024 due to the rising advent of messaging applications such as WeChat in China. Furthermore, the rapid investments by tech giants have also boosted the chatbot growth. For instance, in April 2018, Alibaba invested USD 600 million in SenseTime, China’s leading AI company. This funding will assist the company in increasing their technological innovation rate and expanding their new business opportunities.  

The companies in the chatbot market are spending in the research and development, aimed at developing new and customized chatbots. The vendors in the market are Astute Solutions, Baidu, Botsify, Bold360, Chatfuel, ChatterOn, ChattyPeople, Facebook, Google Inc., Haptik Inc., Helpshift, IBM Watson, Imperson Ltd., Kiwi Inc., ManyChat, Microsoft Corporation, Nuance Communication Inc., LivePerson, Poncho, ReplyYes, Slack Technologies Inc., and SRI International.



About Author


Ronak Bora

Ronak Bora

A graduate in Electronics Engineering, Ronak writes for AlgosOnline and carries a rich experience in digital marketing, exploring how the online world works from a technical and marketing perspective. His other areas of interest include reading, music, and sport.

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