The chatbot market is all set to cross $1 billion in the next 6 years. The Compound Annual Growth Rate of the global chatbot market is predicted to be a staggering 31%, which really isn’t hard to believe. That’s because companies from all across the world are making use of artificial intelligence and other technologies to speed up their growth and keep the trajectory moving up at a steep.
Have a look at the global chatbot market revenue (in U.S. dollars) between the year 2016 and 2025:
Businesses are beginning to invest in a lot of things abreast the technological aspects of the chatbot market, a few of the many being the following:
- Highly effective deep learning models that perform a wide variety of machine learning tasks in vision, speech, and language.
- Defining the use case of the chatbot, depending upon the business needs and problems that the business wants to solve.
- Including small talk in the conception phase.
- Creating a global intent and use entities to specify the user request rather than creating specific intents, which may confuse the audience.
- Working on a conversational growth strategy.
- Focusing on building a persona for the chatbot.
Characteristics of the global chatbot market
With AI and machine learning technologies, chatbots are learning to respond differently to distinct keywords, and formulate their own responses to suit different situations. These features are leveraging:
- Real-time communications
- Customer enquiries
- Optimisation of overall customer satisfaction
- The global chatbot market revenue over $250 million in the past couple years
Some companies have assigned chatbots with their individual jobs, starting from being an admin to an editor, marketer, operator and viewer. They specify suitable permissions for each role.
Industry specific global chatbot market
The chatbot market is going to penetrate a number of industries. Let’s take a quick look at a few leading examples from the Indian as well as the international market.
IBM Watson, Nuance Communications Inc., Artificial Solutions, Creative Virtual Pvt. Ltd., are among the major industry players operating in the global chatbot market. The data forecast is supported by key market dynamics, which is helpful in evaluating opportunities available.
BFSI (Banking, Financial Services & Insurance)
HDFC Bank launched its own chatbot for Messenger to integrate conversational banking, allow customers to transact for bill payments, recharge, travel booking, and more.
ICICI Bank has launched its own bot, named iPal, which is said to be handling over 6 million queries with a sterling accuracy of nearly 90%. It resolves most of the customer queries and makes micro transactions such bill payments, transfers, and other such activities simpler.
Now if we talk about insurance, PNB MetLife launched its chatbot named Dr. Jeevan. The bot helps the users with information regarding their health quotient, and also provides educational videos that are informative and interactive. They have built it on FB Messenger.
The healthcare industry is investing on creating a chatbot technology that can detect an illness by looking at the existing symptoms of a patient. The result will be on the basis of a large pool of data and therefore, it will be authentic and reliable. This will save the patient the hassle of visiting a clinic or a hospital, it will save them money that usually goes away as a consultation fee and it will be cost-effective for the healthcare sector as well, since they wouldn’t have to appoint a support staff.
Endurance is a Russian based company that is taking patient care to the next level. It is using NLP to enhance its innovation by building a companion chatbot for patients suffering from Alzheimer’s. The bot will identify any deviation in the conversation and immediately inform the doctor or the concerned family member about it.
Goibibo has recently built a WhatsApp bot that allows passengers to confirm their flight details, pre-book seats and suggest changes, if necessary. The bot conversation is interactive, easy to understand and triggers an error message every time there is an incorrect entry.
Another travel competitor, ixigo, is hitting the platforms such as Facebook Messenger and WhatsApp with their company chatbot ixibaba. The CEO of the company suggests that chatbot automation is critical in reaching out to a billion users with chat-based information. The company aims at bringing about a travel chatbot evolution by offering a human-like-persona that is quick at providing travel planning and booking solutions. It even entertains odd queries with quirky yet sophisticated responses.
Yatra has launched its own FB Messenger bot to help customers search for and book flights. Moreover, Meru is among the world’s first cab service providers to allow customers to book a cab through a chatbot. This is also available on FB Messenger.
Lego’s chatbot is solving the longest prevalent customer problem, which is to choose the right gift. Ralph, the gift bot, provides suggestions and personalised gift recommendations directly to the users via Messenger.
It will ask the user a few simple questions, like their location, age of the person they are buying the gift for, and the budget. Once the user shares the details, they will see product themes and options to choose from. The link is automatically added to the cart once they select the product such that they can directly buy it from the LEGO website.
The LEGO chatbot is available in the UK, US, France, Poland and Germany and has seen a 6X return on their ad spend. The bot also helped the company reduce their cost per conversion by a whopping 31% as compared to other conversion-based ads.
Another e-commerce industry is Titan. They launched a chatbot on their online store to improve user engagement & attract millennial shoppers looking for convenient ways of online shopping.
Shopsense is another retail technology startup that has launched Fify. It enables customers to discover products & make transactions with an easy-to-use chat tech interface.
The adoption of chatbots by other sectors, like the news & media industry, food & beverages companies, hospitality, etc., is increasing considerably. The demand in the news & media sector is majorly driven by the live news feed connecting the masses to engaging content. While the biggest advantage is engagement and convenience, it does not make the user search for news and shows topics that interests them. Further, the marketing industry is benefitting from the chatbot technology because it is helping them derive unconventional marketing opportunities and advances.
Global Chatbot Market Revenue
Here’s a quick look at the monetary benefits when you build a chatbot. The information in the image below covers the major areas worldwide.
Large Enterprises Are Making The Best Use of Current Chatbot Features
The global chatbot market has been segmented into small enterprises, medium-sized enterprises, and large enterprises. An estimated 50% of small and medium business units engaged in e-commerce have indicated conformance to the revolutionary changes witnessed in customer services and digital marketing. In the meantime, the large enterprises are expected to remain the key demand-driver for chatbots generating $626.3 million for the global market by 2024!
They have an undefeated advantage over the rest of the segments because of digital marketing applications. The segment of large enterprises presents massive demand for chatbots owing to the involved activities that facilitate business process automation. In fact, their marketing strategies and social media involvements keep them in the lead dominating position.
From a geographical standpoint, North America will contribute a massive share in global chatbot revenue. It is known to account for a massive $52.7 million as of 2015. The continent witnesses a healthy growth for chatbot market, mainly due to-
- Technological advancements and,
- Available funds
This is the key force driving it to further improvements. Along with in the US, the chatbot market in maturing in Europe as well in its emerging economies.
Chatbot Market Dynamics
The open-source ecosystem is driving innovation and adoption in the chatbot market. With numerous advancements and tools, creating a chatbot is now an easy process. This trend is going to give a huge boost to the market.
Further, there are business needs that leaders have to optimise and strengthen-
- Customer management costs
- Progressive growth in NLP
AI-driven chatbots are outperforming the rule-based ones, especially in offering a personal touch and bringing in high-user engagement.
The global chatbot market depicts the presence of a highly competitive vendor landscape, says Transparency Market Research on the basis of their newly published report.
Owing to the presence of technology-driven companies such as Google, Facebook, and Microsoft, a high spirit of a healthy growing competition exists in the market. In fact, they together have been recently holding more than 90% of the share in the global chatbot market. However, this is not stopping several other companies such as Pandorabots, Inc., and Slack Technologies, from creating smart innovations and tightening the competitiveness in providing the best services. Plans of mergers and acquisitions are under discussion in the form of key strategies to expand their presence in the global chatbot market.
The increasing demand for smartphones and the tremendous use of messenger apps holds a major role in the proliferation of chatbot market, especially in countries like India and China. These two countries alone have defined Asia-Pacific as the fastest growing region.
If you are in the chatbot industry and want to grow, a key to maintain the long-lasting success of a bot is-
- Fine-tuning the training period
- Monitoring what the users are saying
- Adapting with the flow or creating new use cases
Even when the bot is in production the job is still not done. There is much deeper analysis and data collection that needs to be taken care of. It’s all about making use of chatbots to grow your business and not just maintain the status quo.
You can begin by taking the first step towards conversational growth strategy. For this, you have to gather all the information you need to deliver and standardise every process. Figuring out what features you have to consider is also important-
- Context is something that seems to be common sense to humans. But it’s not the same in the case of a machine or a chatbot. So, it requires training.
- Consistency to setup and create a convincing brand image.
- Optimisation for improvement so that the bot can understand the difference between 3! as a factorial and 3! as an exclamation.
- Personalisation so that every user gets an individual experience rather than feeling like a part of a large customer base.
- And lastly, empathy, because in the end we all like being valued.
So, you have to build and train your chatbot in a way such it becomes the first preference of your customers to look for answers and resolve queries. Otherwise, what’s the point?