The global Chatbot market was valued at USD 4.86 Billion in 2022 and is projected to reach USD 26.81 Billion by 2030, registering a CAGR of 23.8% for the forecast period 2023-2030.
Chatbot is a computer program designed to simulate conversation with human users, especially over the internet. It is utilized for a variety of applications such as education and training, sales and marketing, customer services, entertainment, and healthcare. It utilizes artificial intelligence to understand and solve the problems of users. It is useful in many ways including helping the users book tickets to events and shows, processing return and exchange requests, guiding them to find products, checking inventory stock, and recommending items. People like them because they assist them in getting through those tasks quickly so they can focus their attention on strategic, engaging activities, high-level, that require human capabilities that cannot be replicated by machines.
Moreover, this also helps students to better understanding of any task and also give feedback which benefits student for better improvement. It is more beneficial for HR to converse with employees and automate HR operations such as onboarding, driving, recruitment, and improving the overall employee experience digitally.
- 2022: USD 4.86 billion
- 2030: USD 26.81 billion
- CAGR (2023-2030): 23.8%
Drivers Propelling the Demand for Chatbot include:
Increasing application of the generative model in chatbots is driving the growth of the chatbots market:
A generative model is a type of machine learning model that can make new data, such as audio, text, and images, they are surging being utilized in chatbots to enhance their capabilities and make them more engaging and informative for users. This model can create text that is more similar to human language. A generative model is utilized to make more informative and customized responses to user problems. Because it can provide content and generate various responses that are related to humans according to the needs of human beings. Moreover, generative models are developing innovative applications that can create text formats including musical pieces, letters, scripts, poems, etc. These techniques in chatbots can utilized in various applications and industries. Additionally, chatbot are improving their model which resembles human beings which mainly accelerates the growth of the market.
Leap in demand for endless consumer assistance are accelerating the market growth of Chatbot:
The leap in demand for endless consumer assistance is a major driver of the growth of the chatbot mwarket. Chatbots supply 24/7 customer support without the requirement of human staff. This is becoming more important as customers expect to be able to get assistance from businesses at any time of day or night. Chatbots are being utilized by a variety of businesses of all sizes to provide customer support. Chatbots answer various questions of users and resolve many issues. They can provide information about different products and services of the customer which can help clear problem-related products and services. Moreover, virtual assistant is one of the types of chatbot that can aid users with a variety of tasks including managing schedules, ordering products, and foods, and booking appointments at hospitals. Additionally, the chatbot has developed one of the best features medical chatbot which helps to answer the question of the medical condition of the patient and provide information about medication, and treatment. It provides support and guidance to the patient which assists in enhancing the health of the patient. These are different factors that will help to grow the market in the upcoming year.
Restraint in the Chatbot Market
Incompetence to recognize buyer intent and respond effectively may hamper the growth of the chatbot market:
Incompetence to recognize buyer intent and respond effectively is hindering the chatbot market growth. The lack of ability of chatbots to admit buyer aims and respond effectively is a major hindrance to the growth of the chatbot market. Buyer purpose is the customer's objective when they interact with it. Chatbots must be able to acknowledge buyer intent to provide applicable and helpful responses. Moreover, sometimes if the chatbot is not able to understand the requirements of the users it provides irrelevant information which does not help to solve the problem of the users. Therefore, this leads to an increase in the user's disappointment and frustration. It will also affect the reputation of the businesses that are using chatbots.
Despite this challenge, chatbots require to be trained on a large dataset of examples to learn to recognize buyer aims. This dataset should contain examples of customer issues that represent a variety of buyer intents. Machine learning algorithms can be utilized to train chatbots to identify buyer intent.
Challenges in the Chatbot Market
Complicated time-consuming setup and maintenance pose a challenge to the Chatbot market:
The complicated and time-consuming setup and maintenance of chatbots is the main challenge for the chatbot market. Chatbot is a complex system that needs relevant expertise to set up and maintain. This is not possible for small businesses which are having limited IT resources. There are various chatbot platforms available which have different strengths and weaknesses and this is difficult to recognize the right chatbot platform according to the needs of consumers. Chatbots frequently require to be racially mixed with existing business systems, such as e-commerce platforms and customer relationship management (CRM) systems. This can be a complex and challenging task. Moreover, the chatbot requires continuous updates and maintenance. It includes such as adding new features, fixing bugs, and adding new data to the chatbot. These are various challenges that mainly affect the growth of the chatbot market.
Opportunities in the Chatbot Industry
Beginning towards the development of a self-educated chatbot to convey humanlike conversational experience:
The progress of self-educated chatbots that can convey resemble human conversational experiences is a better opportunity for the chatbot market. Chatbot is developed which does not need any type of human involvement. It provides information human-like and allows more natural and engaging conversations with users. Chatbot is improving according to the preferences of users and their various needs. This makes them more flexible to change than traditional chatbots, which are commonly fixed in their performance. The improvement of self-educated chatbots is still in its initial stages, but it is a rapidly increasing field. Several manufacturers are working on developing self-educated chatbots, and there is a high investment in this area. It is utilized in a variety of applications such as customer service, education, healthcare, and entertainment.
Segment Analysis of the Chatbot Market
The Chatbot market is segmented by application, bot communication, industry, component, and region
The website segment held the largest market share in 2022:
Websites gained the largest share in the chatbot market owing to several factors as it is the common way to connect with many people and businesses online. Chatbots on websites can join a huge audience of potential customers. Websites offer a variety of opportunities for chatbots to be used. For instance, it can be utilized to, answer questions about products and services, and even generate leads and sales, and provide customer service. Chatbots benefits to provide educational information and training to students and employees. For example, a chatbot on a university website helps to answer questions about admissions requirements and course schedules.
The social media segment is expected to rise with considerable CAGR during the forecast period. Social media is a well-liked way for people to interact with brands. Chatbots on social media significant businesses provide customer service, and even generate leads and sales. This source is continuously evolving and adding new features that help to satisfy the needs of users.
By Bot Communication
The audio segment was the leading segment in 2022:
Voice assistants and smart speakers are becoming highly popular in various businesses and homes. This has led to a raised demand for chatbot which is utilized with voice assistants and smart speakers. Audio chatbots are easier to handle than text-based chatbots, especially for users who are on the go or who have their hands full. For instance, people can listen to an audio chatbot while they are daily activities.
Moreover, the video segment is gaining traction due to the rising popularity of video conferencing and video chat. It is a better way to connect with people in both professional and personal settings. This has led to a surge need for chatbots that can be applied with video conferencing and video chat platforms. It utilizes natural language processing (NLP) to understand and respond to human talk and various facial expressions.
In 2022, the healthcare segment dominated the global market:
Increasing demand for the healthcare segment because the global population is rising and many people are suffering from chronic diseases. This is a major factor that helps to surge the demand for healthcare services. This is beneficial to identify needs by providing patients with access to information about health and providing service 24/7. This also helps to increase engagement with customers remind patients of the time of medicine and provide mental support for their health. Moreover, it is also used to give answers to patient questions to schedule their appointment according to their time availability. Therefore, the rising need for chatbots in various healthcare services will help boost the growth of the market in the upcoming year.
Moreover, in the E-commerce segment need for the chatbot is increasing day by day because it helps users find the products they are looking for and to complete the procedure of purchases. It also provides support to the customer by recommending information about the best quality products and improving customer experience.
North America occupies the largest market share in 2022:
North America contributes highly to the global chatbot market growth due to the rising adoption of emerging technologies, such as voice recognition techniques, and natural language processing. These are major factors that help to raise the chatbot market in various countries including the U.S. and Canada. These both are highly contributing countries that help to generate more revenue in the chatbot market. Moreover, different industries such as healthcare, telecom, IT, entertainment, retail, and BFSI are developing various tools to solve customer's issues more quickly.
Additionally, chatbots help many businesses with increased customer satisfaction and reduced operating costs. North America shares maximum markets as its major hub of startups in the chatbot industry. Many major enterprises are developing the chatbot chatbots in their routine customer service activities.
Asia Pacific chatbot market is expected to grow with the fastest CAGR over the forecast period. This growth is attributed to increasing use of messenger applications and the need for customer analytics. Chatbots integrated with messenger apps can provide a better user experience and a higher return on investment. Messenger apps allow chatbots to save chat history for future purposes and gain actionable insights.
Segmentation Analysis of the Chatbot Market
- Contact centers
- Social Media
- Mobile Application
- Information Technology
- Financial Services
- Software Development Kit
Key companies profiled in the chatbot market report include Ai, Inc., eGain Corporation, IBM Corporation, Inbenta Technologies Inc., Next IT Corp., Nuance Communications, Inc., Acuvate; Aivo, Artificial Solutions, Botsify Inc., Creative Virtual Ltd., and others. These companies are adopting strategies such as facility expansions, mergers, acquisitions, new product launches, and collaborations to gain a competitive edge in the market.
|Market Size in 2022
|USD 4.86 Billion
|Market Forecast in 2030
|USD 26.81 Billion
|Compound Annual Growth Rate (CAGR)
|Revenue (USD Million) and Volume (Kilo Tons)
|By Application, By Bot Communication, By Industry, By Component and By Geography
|By Bot Communication
Impact of the COVID-19 Pandemic on the Chatbot Market:
The COVID-19 had a mixed impact on the chatbot market. In the initial stage pandemic hurt the market because of disruption in the supply chain and various needs which helped to develop a new chatbot model. However, the chatbot helps many businesses to solve the problem of the pandemic. It is utilized to provide customer services answer questions about COVID-19 and help businesses to automate operations.
Moreover, the pandemic has driven the development of new chatbot technologies. For instance, it is also able to give an answer to complex questions and understand human emotions. Many industries are investing in research and development which help to increase the satisfaction of users, how can chatbot helps customers in various ways and resembles human being which is significant for the rise in the growth of the market in upcoming years with high CAGR.
In September 2023, Meta is preparing to launch artificial intelligence chatbots, each with unique personalities, on its social media platforms as early as this week. This move is aimed at appealing to a younger user demographic. This will help attract many towards chatbot market which will help increase market majorly.
In September 2023, Meta is reportedly working on generative AI chatbot called ‘Gen AI Personas' for younger users and is expected to unveil it. This is will helpful incorporate this feature in various industries which will benefits many companies for reduce their cost.