New York, March 18, 2024 (GLOBE NEWSWIRE) -- The global chatbot market size is predicted to expand at ~22.87% CAGR between 2024 and 2036. The market is projected to garner a revenue of USD 84.78 billion by the end of 2036, up from a revenue of ~USD 5.87 billion in the year 2023.Chatbots are growing in popularity due to increased demand for automation. Companies are looking to reduce their operational costs, boost their efficiency, and improve their customer service, which is causing the market for chatbots to grow.
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Surveys have found that over 50% of US consumers would use a chatbot for customer service, and more than 95% of consumers believe customer service will benefit from messaging technology, which chatbots use. Only 5% of companies still do all of their tasks by hand, so companies can now boast that 92% of their knowledge workers have improved jobs due to automation, and 67% greater productivity. Chatbots have become a popular way to perform these automations, since they are relatively easy to deploy and aren't nearly as expensive as developing apps. Rather than filling out web forms, or picking up phone calls, a chatbot instead just runs a set of simple rules that can handle easily many of the most common customer inquiries.
Growing Adoption of AI and NLP Technologies to Boost Market Growth
The growing number of companies that are adopting NLP (Natural Language Processing) and AI (Artificial Intelligence) technology is driving the demand for chatbots. Many businesses are using or testing NLP (1.6%) or voice recognition software (2.8%). Over 49% of businesses are using some form of AI to help them utilize big data more effectively. These technologies help chatbots understand and respond to natural language, making them much more effective.
NLP and AI technology, enables chatbots to quickly and efficiently analyze and process natural language input so that they can properly read a customer's question and return a reliable answer. Chatbots that use NLP can also identify a user’s intent and return a previously determined response, resulting in a more personalized conversation and better experience for the customer. As businesses and organizations increasingly recognize the benefits of chatbots in improving customer service and streamlining operations, the demand for chatbots is expected to continue to grow.
Chatbot Market: Regional Overview
The market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa region.
Highest Number Of Chatbot Users to Drive Growth in the North American Region
The chatbot market in the North American region is estimated to garner the largest revenue by the end of 2036 driven by the highest number of chatbot users, as well as the highest number of chatbot vendors in the region. In 2023, as many as 90% of web users in the US chatted with chatbots, and 7 out of 10 people were happy about it. Banks and credit unions in the US are also expected to adopt AI-powered chatbots in a big way, as they will use chatbots to provide customer service, marketing, and fraud prevention. Moreover, the region is home to a large number of technology startups that are expected to invest in the development of AI-powered chatbots. For instance, in September 2021, Finn AI, an AI-powered chatbot platform designed specifically for banks and credit unions, announced that its conversational AI chatbot is now a premium Client Application on the Genesys AppFoundry, an online marketplace that brings contact center solutions from its ecosystem partners to its Genesys Cloud CX customers.
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Rising Adoption Of Chatbots By Businesses To Automate Business Operations to Drive Growth in the European Region
The European chatbot market is estimated to garner the largest revenue by the end of 2036 driven by the rising adoption of chatbots by businesses to automate customer service processes, reduce costs, and increase customer satisfaction. Additionally, the rising adoption of chatbots by governments to provide citizens with timely and accurate information about public services is also expected to drive the growth of the Europe market. For instance, the European Parliament wants to ensure that chatbots are compliant with EU laws to protect consumers from potentially false or malicious content. By setting safeguards in place, the European Parliament can ensure that the chatbot market remains profitable while also protecting users.
Chatbot Segmentation by Offering
- Solutions
- Services
Chatbot solutions segment is anticipated to generate the highest revenue by the end of 2036 due to their ability to offer businesses customized solutions. Businesses are looking to deploy chatbots as a way to improve customer engagement. AI- chatbots solutions provide a personalized experience, while enabling businesses to understand and assist their customers in a more efficient way. It was noted that the number of websites and apps that offer a chatbot experience has surged 95% over the past two to three years. Studies show live chat as having the highest satisfaction levels for any customer service channel, with 73%, compared with 61% for email and 44% for phone. While chatbots are used mainly for communication, they are also being integrated with other business systems such as CRM and ERP to create a seamless customer experience. This can translate into both efficiency gains and cost savings.
Chatbot Segmentation by Deployment Mode
- On-premises
- Cloud
The cloud segment in the chatbot market is anticipated to hold the largest revenue by 2036 end and is likely to witness significant growth in the coming decade due to its scalability. Chatbots can be scaled up or down with ease, depending on demand. This makes it the perfect, cost-effective method for businesses of all sizes. Cloud chatbots are particularly cost-effective, the business does not need to invest significantly in hardware or infrastructure and, reportedly over 58% of businesses say that chatbots result in significant ROI through minimal investment and reduce IT costs substantially.
Chatbot Segmentation by Type
- Menu-based
- Linguistic-based
- Keyword Recognition-based
- Contextual
- Hybrid
- Voice bots
Chatbot Segmentation by Technology
- Machine Learning/Deep Learning
- Natural Language Processing
- Automatic Speech Recognition
Chatbot Segmentation by Application
- Customer Support
- Personal Assistance
- Information Technology Service Management ITSM
- Finance and Accounting, HR
- Sales & Marketing
- Contact Centers
- Operations & Supply Chain
Chatbot Segmentation by End User
- BFSI
- IT and Communications
- Retail & E-commerce
- Healthcare
- Energy & Utilities
A few of the well-known indsutry leaders in the chatbot market that are profiled by Research Nester are Creative Virtual, eGain Corporation, IBM Corporation, Botsify, Aivo Conversational AI, Acuvate, Chatfuel, Google Inc., Inbenta Holdings Inc, Bitonic Technology Labs Inc., and other key market players.
Recent Development in the Chatbot Market
- CREATIVEVIRTUAL has unveiled an upgraded version of its VOn Person, Gluon, in May 2023. Gluon has a more intuitive user interface and is more natural language programming (LLM), GPT, Vportal, etc. friendly.
- Google in March 2023 released a new chatbot called Bard. Microsoft has a healthy lead due to this release. Bard will be available to start for users in the United States and United Kingdom and will be available for other users and countries soon thereafter.
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