Chatbot market size is set to exceed USD 1.34 billion by 2024
In the trending era of artificial intelligence, chatbot market is witnessing extraordinary growth owing to the prevalence of messaging platforms, virtual assistants, and the efforts of various businesses to deliver prompt customer service.
Built using AI and machine learning technologies, today’s chatbots are characterized by the ability to respond differently to varied keywords, learn, and adapt their own responses to suit diverse situations. These features have proven to be ideal in leveraging the bots for real-time communications, handling customer enquiries, and other aspects of businesses to optimize overall customer satisfaction, pushing the global chatbot market revenue over USD 250 million in 2017.
An undeniable fact regarding AI technology is the prolific speed of its evolution, which in the process is transforming the chatbot industry. From the basic rule-based chatbots programmed to handle uncomplicated customer queries to the cloud-based, advanced self-learning ones that can understand intent and modify their output, chatbots have been extensively adopted in segments such as ecommerce with continuous integration of business data and internal systems.
For instance, eBay offers the services of ShopBot, a virtual personal assistant for shopping on its online platform that helps customers find desired products. A customer has to type in a short description of what they want, after which eBay ShopBot will ask relevant questions and display suitable results.
Reportedly, ShopBot users are three times more likely to search specific products than those just browsing through the website. Similar AI powered bots have been implemented worldwide across other online stores, travel & hotel booking establishments, personal care businesses, and even fast-food chains through website windows and inbuilt chatbot features of Facebook Messenger, WeChat, and other messaging platforms. Application of these assistive chatbots has delivered improved engagement and is driving the sales numbers in variety of industries, further boosting the chatbot market.
According to a report on Chatbot Market published by Global Market Insights, Inc., customer service is the highest contributing segment with a 42.52% share. This can be derived from the significance of customer service in retaining existing and attracting new potential customers, with the growth of industries like healthcare and BFSI dependent on consumer feedback and brand visibility. Chatbots enable personalized services, less waiting time, uninterrupted customer support, and a feedback channel to a large number of customers, guaranteeing consumer satisfaction aimed at by these industries. Reportedly, the banking sector spends almost USD 150 million annually on customer service and the increasing use of bots for automated service will bolster the overall chatbot market.
Elaborating on the advantages of chatbots in banking, highly targeted, and personalized products can be delivered to customers at the right time depending on their profile data through chatbots built in messaging apps, thus acting as a lead generation tool. A leading example is Erica, the chatbot and virtual assistant for the Bank of America, that analyzes customer data to help its customers make smarter decisions. Erica provides balance and credit reports, sends notifications, suggests saving schemes, assists with transactions, and makes paying bills easier. Many other banks have adopted such AI based bots and given an impetus to the chatbot industry.
Apart from its role in ecommerce, BFSI, and other similar industries, the chatbot market can be expected to penetrate into medical assistance and patient care applications as well. In addition to the common uses of chatbots in booking appointments and making payments, other uses arising from the advent of technologies like AI, machine learning, and NLP have been found. These include detection of medical conditions by knowing the symptoms, suggesting medicines and treatments along with other assistive healthcare features.
One such innovative patient care product using NLP is the companion chatbot by Russian based company Endurance, which is designed to chat with Alzheimer’s patients who are afraid to converse with other people and suffer memory losses. The bot will identify any deviation in the conversations that could indicate a problem and being cloud-based, it can communicate the logs and findings with relatives and doctors.
As evident from the wide range of applications for chatbot market, AI is not only beneficial to IT corporations anymore and many multinational companies are investing heavily into R&D. The sprinting AI industry is allowing the development of more efficient and intelligent bots capable to chat with thousands of customers at a time with 24 hour support and client-specific responses.
The increasing demand for smartphones and the tremendous use of messenger apps has supplemented the proliferation of chatbot market, especially in countries like India and China, which have defined Asia-Pacific as the fastest growing region in the segment. With the growing preference towards faster customer service and acceptance of AI based tools in business operations throughout the region as well as globally, the global chatbot market is slated to witness a CAGR of 31% from 2018 to 2024.
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