The global chatbot market is extremely consolidated with leading three companies namely Facebook, Google, and Microsoft that collectively held a stupendous 97.5% of the market in 2015, states Transparency Market Research in a new report. Being well-established and recognized, these three companies enjoy brand name and most consumers prefer their products and services.
Yahoo Inc. is another significant player in the chatbot market that is popular among users. Howbeit, the massive volume of communication handled by messaging applications such as WeChat, WhatsApp, Line, Skype, Facebook, Twitter, and Kik leaves very little scope for the entry of new players. Competition in the market is stiff as players vie to outdo rivals by delivering better customer experience. They are striving to offer outstanding customer service to resolve customer complaints and issues which will help them steal a march over their competitors.
As per estimates of a report by Transparency Market Research, the global chatbot market will rise at a staggering 27.8% CAGR in terms of revenue over the forecast period between 2016 and 2024. Progressing at this rate, the market will become worth US$994.5 mn in 2024 from US$113.0 mn in 2015. In terms of enterprise size, large enterprises is anticipated to continue to remain key segment and generate a revenue of US$626.3 mn by 2024 end. This is because large enterprises extensively employ chatbot for digital marketing applications and also present a massive demand for chatbot to initiate business process automation activities.
Geography-wise, North America holds a massive share in the overall market; the region is anticipated to hold on to the leading spot over the report’s forecast period.
Use of Chatbots in Digital Marketing Activities Drives Growth
The primary factor boosting the growth of the chatbot market is vast development in artificial intelligence (AI), because of which chatbots have evolved from simple answer machines to a smart platform for engaging consumers. Businesses are also using chatbots for marketing needs that demonstrate the large spectrum capabilities and capacities of chatbots.
Apart from this, technological advancements leading to the implementation of artificial intelligence in consumer electronics is aiding the chatbot market to expand its consumer base. Over the past few years, voice and messaging services have become key and are likely to remain so over the forthcoming years. Businesses are increasingly adopting online messaging services and using chatbots for digital marketing campaigns for customer engagement and for lead generation. This is positively influencing the global chatbots market.
Lack of Application Areas Hurting Growth Prospects
The key factor challenging the growth of this market is the significant rise in the capabilities of chatbots which far exceeds the growth in the areas where they can be applied. Further, the growth of this market is restrained due to several hosting issues that need to be resolved. These include chatbot monitoring, management, security, and integration. The failure of hosting services to provide aforementioned services is restraining several enterprises to enjoy the benefits of chatbot. Nevertheless, chatbot as a service is likely to provide significant opportunities to the market in the forthcoming years.