The Global Conversational AI Market size is expected to reach $15.6 billion by 2027, rising at a market growth of 16.8% CAGR during the forecast period. Conversational AI helps in the usage of speech-based assistance, chatbots in order to automate communication and to create personalized customer experiences. In addition, conversational AI is a type of AI, which enables users to communicate with devices, applications, and websites every day using voice, touch, text, or gesture information. It is one of the most important components in open interactions and personal assistance activities.
By adopting advanced AI applications using machine learning (ML) and natural language understanding (NLU), companies can get the support for their business to expand at an exceptional pace with direct information. Additionally, conversational AI enables better and faster interaction for the users by utilizing their own terminology or words and for companies. It also provides a way to create a connection of the enterprises with their customers via customized interaction and get an exceptional volume of crucial business data. This would improve customer satisfaction and also generate more actionable insights for the companies.
The conversational AI market is estimated to witness significant revenue growth in the coming years due to the growing customer engagement via social networking sites. Over the past few years, social networking websites like Facebook, Instagram, Snapchat, LinkedIn, WhatsApp, and Twitter have witnessed a significant deployment of conversational AI solutions, which would accelerate the market growth.
With the outbreak of the COVID-19 pandemic, the growth of conversational AI-based technology like conversational bots has increased to a great extent. The pandemic would further positively impact the overall growth of the global conversational AI market in the forecast period. Although, the initial phase of the pandemic has brought various obstacles in the business domain due to the low availability of a skilled workforce, imposition of lockdown restrictions and travel ban. Conversely, the adoption of chatbot solutions within various verticals like retail & e-commerce, healthcare, and telecommunication industries has increased during the pandemic, which would propel the growth of the conversation AI market during the forecast period.
The term ‘customer services’ has evolved a lot in the last few years, and currently, it is not restricted to only customer call centers wherein, customers call and interact with the company executive for their problems. The emergence of various platforms and better channels has opened several opportunities for companies to interact with their customers and enhance the customer experience. Companies are increasingly adopting conversational AI solutions to provide better customer services. The shifting focus of the companies from offering customer support services via emails or messages to AI-based chatbots is assisting companies to improve customer experience and engagement.
The growing popularity of various social media platforms like Twitter, Facebook, Telegram, Skype, Tumblr, Kik, and WeChat is motivating companies to increase their presence on these platforms to enable better customer interaction. In addition, the popularity of social media platforms has contributed to the high adoption of conversational AI solutions in the last few years. The presence of a huge customer base on these social media platforms is creating lucrative opportunities for the companies as a customer spend most of their time on such platforms. Additionally, the social presence of companies is helping them to improve customer engagement for branding and advertising.
There is an increase in the adoption of conversational AI solutions across different verticals, which would cater to different engagement types like customer services, content consumption, and other productive engagements. Though, consumers have restricted knowledge regarding virtual assistants, chatbots, and digital personal assistants, and their advantages. For example, Brazil and India have the largest base of smartphones users; although, the awareness about the advantages of technologies is comparatively less in these nations as compared to the developed ones.
Based on Component, the market is segmented into Platform and Services. The majority of the companies within the conversational market are offering a conversational AI platform to develop applications, which would resolve customer queries, give advice and recommendations by utilizing NLP, and other dialog-related technologies. The conversational AI platform includes various bot builder tools to develop numerous chatbots and assistants for companies. The key providers for conversational AI assist in deploying intelligent automation and technology for efficient customer engagement.
Based on Technology, the market is segmented into Natural Language Processing (NLP), Automated Speech Recognition, Deep Learning and Others. The evolution of AI technology is the result of its increasing demand from various verticals like healthcare and life sciences, BFSI, retail & eCommerce, manufacturing, telecom, and travel and hospitality. The growing requirement among companies to generate important insights from customer conversations on different platforms is estimated to surge the growth of the conversational AI market during the forecast period.
Based on Deployment Type, the market is segmented into Cloud and On-premise. The cloud segment is projected to display the highest growth rate in the conversational AI market over the forecast period. Deployment is the process of establishing an IT infrastructure with operating systems, hardware, and applications, which are needed in order to operate the IT ecosystem. Companies can implement conversational AI on a particular deployment mode that can be based on availability, security, and scalability.
Based on Type, the market is segmented into Chatbots and Intelligent Virtual Assistant (IVA). The Chatbots market dominated the Global Conversational AI Market by Type 2020, growing at a CAGR of 14.8 % during the forecast period. The Intelligent Virtual Assistant (IVA) market is estimated to grow at a CAGR of 18.7% during the forecast period.
Based on End User, the market is segmented into Retail & eCommerce, BFSI, Travel & Hospitality, Healthcare, Telecom, Media & Entertainment, and Others. The retail & E-commerce segment accounted for the highest revenue share in the conversational AI market in 2020 and is estimated to acquire substantial growth over the forecast period.
| Report Attribute | Details |
|---|---|
| Market size value in 2020 | USD 5.6 Billion |
| Market size forecast in 2027 | USD 15.6 Billion |
| Base Year | 2020 |
| Historical Period | 2017 to 2019 |
| Forecast Period | 2021 to 2027 |
| Revenue Growth Rate | CAGR of 16.8% from 2021 to 2027 |
| Number of Pages | 345 |
| Number of Tables | 554 |
| Report coverage | Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Competitive landscape, Companies Strategic Developments, Company Profiling |
| Segments covered | Component, Technology, Deployment Type, Type, End User, Region |
| Country scope | US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria |
| Growth Drivers |
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| Restraints |
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Based on Regions, the market is segmented into North America, Europe, Asia Pacific, and Latin America, Middle East & Africa. Europe is also estimated to emerge as the second-largest region in the market with a significant market share over the forecast period. The rising demand to minimize enterprise workloads related to customer engagement & retention is increasing the adoption of conversational AI solutions in Europe.
Free Valuable Insights: Global Conversational AI Market size to reach USD 15.6 Billion by 2027
The major strategies followed by the market participants are Product Launches. Based on the Analysis presented in the Cardinal matrix; Microsoft Corporation and Google, Inc. are the forerunners in the Conversational AI Market. Companies such as Amazon.com, Inc. Artificial Solutions, Conversica, Inc. are some of the key innovators in the market.
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Microsoft Corporation, Baidu, Inc., IBM Corporation, SAP SE, Oracle Corporation, Google, Inc., Amazon.com, Inc., Artificial Solutions, Conversica, Inc. and Inbenta Technologies, Inc.
By Component
By Technology
By Deployment Type
By Type
By End User
By Geography
The global conversational AI market size is expected to reach $15.6 billion by 2027.
Increasing customer engagement via social media platforms are driving the market in coming years, however, Absence of knowledge about conversational AI solutions among enterprises have limited the growth of the market.
Microsoft Corporation, Baidu, Inc., IBM Corporation, SAP SE, Oracle Corporation, Google, Inc., Amazon.com, Inc., Artificial Solutions, Conversica, Inc. and Inbenta Technologies, Inc.
The expected CAGR of the conversational AI market is 16.8% from 2021 to 2027.
North America is estimated to acquire the largest market share over the forecast period. The high demand for improving customer support service to support customer retention initiatives is among the key factors fueling the growth of the regional market.
The Machine Learning and deep learning segment is estimated to exhibit the highest growth rate over the forecast period.
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