Chatbot Market Size Estimated to Surpass $10.5 Billion Mark by 2026
The global Chatbot Market is estimated to surpass $10.5 billion mark by 2026 growing at an estimated CAGR of more than 26.2% during the forecast period 2021 to 2026. The demand of Chatbots has increased considerably, bots are surrounding us today such as Google Assistant, Apple Siri, Amazon Alexa which are simplifying our life by automating mundane tasks, helping in our daily tasks and improving end-user experience. There are more than 50% Medium to large enterprises will have deployed product like chatbots in their services. According to DigitasLBi, 37% of Americans say they are prepared to create a purchase through a chatbot. Consumers would spend over $55 per buy on average. If a chatbot were accessible, according to myclever Agency, 33% of UK residents would purchase fundamental products such as clothing and food
Chatbot Market Segment Analysis - By Operation
On Premises technology dominates the chatbot market, however cloud technology is projected to have a significantly higher growth rate during the forecast period. AI technology has also been increasingly deployed using cloud technology in recent years by companies across a number of industries as a customer service chatbot that employs NLP and machine learning to understand what the most commonly asked questions are, and become more efficient at providing personalised answers. This adoption has been particularly prevalent in North America.
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Chatbot Market Segment Analysis - By End Use Industry
Retail and Travel and Hospitality sectors dominate the Chatbot market due to significant adoption in customer service applications. In January 2018, credit card giant American Express acquired travel-oriented chatbot provider Mezi and folds it into its patented card-holders travel tool AskAmex. TripActions raised $51 million in Series B financing and is looking to develop infrastructure technology that will unleash the true potential of AI to handle travel. Such developments are anticipated to boosts the market growth during the forecast period 2020-2025.
Chatbot Market Segment Analysis - By Geography
APAC will be the fastest growing market for Chatbot driven by rising demand from hospitality and BFSI sectors in the region. Growing industries and infrastructure in the Asia-pacific region are adopting emerging technologies such as chatbots. Chatbots support companies by saving more than 30 percent of customer service expenses by shifting reaction times and freeing staff for more difficult job. In addition, around 56 per cent of businesses working in the technology and multimedia industries are planning to invest in chatbots in the coming decade, saving about $8 billion annually in customer supporting costs. The Chatbots in India will show a significant growth due to the rate of technology adoptions & the interest shown by businesses in the emerging technology. Moreover, the rise of messaging applications & advances in artificial intelligence (AI) has created a perfect environment for Chatbots to flourish in that is forecasted to propel the Chatbots market growth. The Indian Railway Catering and Tourism Corporation (IRCTC) is a subsidiary of the Indian Railways that handles the catering, tourism and online ticketing, have launched a Chatbot to help its users answer various queries. This will offer greatly improved and intuitive customer support by answering customer queries.
Chatbots Regulating Destination Tourism Infrastructure and Facilities
Chatbots are normally computer software devices that are pre-programmed to address customers' basic questions. Customers typically have multiple questions after accessing the hotel rooms, ranging from the destination travel infrastructure to the tourism infrastructure. Customers can enquire the chatbots on their several questions, such as hotel equipment, lunch & dinner times, lunch items, dinner, gym facilities, hotel amenities, safety precautions, and so on. Thus, all Destination Infrastructure specific information is provided by Chatbots. In addition, chatbots also include information on tourism facilities that includes local restaurants, nightclubs, pubs, theme parks, entertainment and sports activities, public pools, aviaries, trekking, outdoor games, shopping malls, and others. Chatbots therefore offers all the data relating to the tourism facilities & tourist infrastructure of the destination. According to TMC Trends report by MTT, 43 per cent of travel management companies are planning to invest in chatbot technology.
Real Time Monitoring for Customer Support and Satisfaction
The most famous chatbot is a conversational chatbot, majorly used for conversations with customers. It can also be used efficiently to facilitate background processes or provide clients and organizations with proactive data. Supposedly, this technology is set to grow the organization based on the data collected and will propel the chatbots market as well. The chatbot can significantly add value to the customer service department. In addition, customer support tools such as live chat, help desk, or contact center solutions should already have chatbots introduced when dealing with clients as the first line of defense. However, in other applications, such as sales and marketing knowledge bases is foresee to adopt the chatbot technology more widely that is expected to drive the chatbot market growth. According to a survey by Oracle, Businesses are beginning to see the benefits of using chatbots for their consumer-facing products. 80 per cent of participants said they already planned to use chatbots by 2020 when questioned which evolving technologies they are planning to adopt.
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Chatbot Market Challenges
Security of Customer Information & Cost
This significant concern about the implementation of AI in some of the main fields, such as financial management and security apparatus, is a continuing problem. For instance, the use of Chatbots in industries such as BFSI, Travel and Hospitality and Government is in particular in question. Chatbots used in hospitality store past purchasing records, travel history that challenges data protection and security concerns. A big issue with these machine-controlled services is that a minor ransomware intrusion will interrupt software programmes and service providers' activities, which can lead to anarchy. While AI technology is innovative and forward-looking, these innovations are not afforded to small service providers because they need a massive investment. While Chatbots & Robots are capable of replacing the human workforce, customers still rely on the human workforce when it comes to queries that require difficulty in language processing. Machines like chatbots are limited to answering basic questions. This technologies use the keywords of the questions to have responses. When there is an incident & complicated situation that needs to be worked out, consumers still focus on the human workforce.
Product launches, acquisitions, and R&D activities are key strategies adopted by players in the Chatbot Market. IBM Corp., Naunce Communications Inc., eGain Coporation, Creative Virtual Pvt. Ltd., Next IT Corp., CX Company, Codebaby Inc., Next IT Corporation and others are considered to be the key players of the Chatbot Market
Acquisitions/Technology Launches/Partnerships
In Apr 2019, Reliance Jio has acquired 87% of stake in AI chatbot company Haptik Infotech for $100 M. This strategic investment highlights the dedication to further boosting the digital ecosystem and providing multilingual skills to Indian users of conversational AI-enabled devices. With its founding team and the workforce becoming part of Reliance Jio Digital, Haptik will continue to function as a distinct brand entity.
In Jan 2018, SAP acquired French chatbot start-up Recast.ai. Recast.ai is a collaborative development platform for chatbots. This will help SAPs’ investment plan in machine learning service offering.
Enhanced technological features are anticipated to stimulate market growth in chatbots software such as Natural Language Processor (NLP), multilingual, interference engine, metrics, cloud-based implementation, application programming interface (API), mobile platform compatibility, analytics, multichannel, and single-point search.
According to a survey by Oracle, Businesses are beginning to see the benefits of using chatbots for their consumer-facing products. 80 per cent of participants said they already planned to use chatbots by 2020 when questioned which evolving technologies they are planning to adopt.
Chatbots are renewing the way businesses by interact with customers and offering instant, on-demand assistance solution. The chatbots are significantly fostering engagement between brands and their customers to provide better for both of them.
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