Chatbot Market is expected to grow from its current market value of more than $250 million to over $1.34 billion by 2024. The growth is due to the evolving usage of chatbots for content marketing activities such as digital marketing and advertising. The technological capabilities, individuality and customization are the main features accelerating market growth. With chatbots there to assist, interact and engage with customers, they offer personalized marketing capabilities.
For example, Sephora launched a chatbot in 2016 that asks users to take a quiz while giving the chatbot insights regarding the ways to precisely style their look, enhancing the customer experience.
The chatbot market is benefiting from investments made by its leading investors. These funds are used by chatbot startups for developing NLP technology and chatbot platforms. The investments enhance marketing and promotions through the chatbot platform, increasing customer service, transactions and purchases. However, the lack of awareness about the benefits among businesses and security issues may hinder its market growth.
Currently, customer service application accounts for the largest market share of 43 percent in the chatbot market, followed by social media, order processing and marketing applications. Customer service is the major criteria for businesses to survive in the competitive market. The advent of chatbots allows businesses to offer enhanced customer service by offering 24/7 customer support, real-time query handing and educating the customers about new products and services.
The web-based chatbot is growing at a fast pace at a CAGR of 36.9 percent during the forecast period and is beneficial for the companies selling products directly through their websites.
E-commerce is expected the benefit the most from the chatbot market. With the rapid development and growth of AI, chatbots will only get more sophisticated with time.
Chatbots are also seeing a growth in the BFSI sector as well by helping prevent fraud, assistance in customers in making improved financial decisions and improved customer experience.
AI-based chatbot market is growing at a CAGR of 53 percent as they provide conversational experiences through text and voice. Increasing collaboration in the AI-based companies also drives the market growth.
North America holds a majority of the share in the chatbot market as various tech companies are investing in R&D to implement new technologies and provide an improved user experience. Companies are engaging in strategic partnerships and acquisitions to retain a huge market share and expand their presence worldwide. Asia Pacific is expected to show the highest growth rate of 36 percent over the forecast timeline as chatbots are starting to turn into a necessity for mainstream industries.
The global chatbot market is highly competitive as startups and multinational firms are continuously involved in R&D activities to develop advanced technologies, driving market growth.