Chatbot Market to Reach $13.9 Billion by 2027

Research firm IMARC Group has reported that the global chatbot market reached a value of $3.7 billion in 2021 and is likely to reach $13.9 Billion by 2027, expanding at a compound annual growth rate of 24.68 percent.

The report defines a chatbot as an artificial intelligence (AI)-based computer program used to simulate human conversations as consumers interact with digital devices, developed on developer frameworks with cloud backup, analytics, and database integrations. Chatbots, it said further, are majorly incorporated into messaging applications, websites, mobile applications, and other digital devices for interacting as digital assistants through text or text-to-speech functionalities. They offer various benefits, such as improved efficiency of business operations, customer engagement, branding and advertisement, data privacy and compliance, payment processing, and automatic lead generation and qualification.

The report cites rapid digitization across industries and the increasing requirement for high-quality customer care as key factors driving the growth of the market. Chatbots are an integral component of running effective customer care programs and are used across various industries, including banking, financial services and insurance (BFSI), information technology (IT), telecommunication, e-commerce, and healthcare, for resolving customer queries in minimal time, it said.

Moreover, the widespread adoption of over-the-top (OTT) messaging and social networking applications among consumers, especially millennials, is providing an additional thrust, as are technological advancements like the integration of predictive analytics, machine learning (ML), blockchain, and cloud computing for the development of self-learning chatbots, the report said.

Innovative chatbots can adapt to changing digital environments and provide human-like conversational experiences by learning from users' actions, experiences, and decisions, it said further.

Other factors, including significant improvements in IT infrastructure and extensive research and development in natural language processing, should also drive market growth.

The competitive landscape includes [24]7.ai, Acuvate Software, Aivo, Artificial Solutions, Creative Virtual, eGain, IBM, Inbenta, Kore.ai, LiveChat, Nuance Communications, and Verint, according to the report.