Chatbot Market Report

Chatbot Market Analysis By End User, By Application/Business Model, By Type, By Product Landscape, By Vertical, By Region (North America, Europe, APAC, MEA), And Segment Forecasts, 2014 - 2025

Published: August 2017  |  132 Pages  |  Format: PDF  |  Report ID: GVR-1-68038-598-4

Industry Insights

The global chatbot market was valued at USD 190.8 million in 2016 and is expected to witness a significant growth in the market over the forecast period. This growth is expected to be driven by the increasing adoption of customer service activities among enterprises in order to reduce operating costs.

A chatbot is an interactive application developed using either a set of rules or the artificial intelligence technology. It is designed to interact with humans through the textual conversation process and is integrated with various messaging services, thereby assisting users in various sectors. Various innovations carried out in artificial intelligence and machine learning technologies are expected to enhance the features of chatbots, which, in turn, would drive demand for the market.

U.S. Chatbot Market by Vertical, 2014 - 2025 (USD Million)

U.S. Chatbot Market

Over-the-Top (OTT) messaging applications, such as WhatsApp, Facebook Messenger, and WeChat, among others, are expected to witness increased demand by 2020. This can be attributed to the growing preference of individuals toward messaging applications over social networking sites. Chatbots that are developed for integration with messaging applications are also expected to witness significant market demand in future. Moreover, chatbots are gaining popularity as businesses continue to automate their sales and customer services. The use of chatbots enables organizations to deliver timely services at reduced costs.

Type & Product Landscape Insights

Chatbots are segmented based on types into standalone, web-based, messenger-based/third party. The standalone segment is expected to hold the largest market share over the forecast period.

Many enterprises prefer chatbots for messaging platforms and customer service bots for web-based services in an attempt to increase customer interactions. Chatbots enable enterprises to directly interact with customers and provide data pertaining to customer preferences, which can later be used in digital marketing activities.

The product landscape segment has further been categorized into artificial intelligence, marketing, and human intelligence. The artificial intelligence segment is growing at a rapid pace and is expected to register a CAGR of 25.2% over the forecast period.

Chatbots offers direct customer interaction, hence they are extensively used in digital marketing to update the existing customers about the products and services. Thus, the marketing segment is expected to result in substantial growth over the forecast period.

Application/Business Model & Vertical Insights

The business model segment has been sub-segmented into various types such as bots for service, bots for social media, bots for payments/order processing, bots for marketing, and others. The bots for social media segment held a significant share in terms of number of bots. However, in terms of revenue, the bots for service segment captured majority of the market share. The bots for marketing and bots for payments/order processing segments are expected to account for large market shares over the forecast period.

Chatbots find applications in a wide range of industries, such as healthcare, retail, BFSI, media & entertainment, travel & tourism, e-commerce, and others. The BFSI segment accounted for the largest market share in 2016 and generated the highest revenue.

Chatbots are gaining popularity in a number of sectors owing to benefits such as remote connectivity and virtual presence, which substantially reduces the transportation cost. The travel & tourism vertical is expected to portray the highest growth over the forecast period.

End User Insights

The global market has been segregated based on end users into large enterprises, medium enterprises, and small enterprises. Several large enterprises develop their chatbots with a specific set of rules; however, they are expected to optimize their chatbots in future in a bid to achieve sophisticated operations.

Approximately 45% of end users prefer chatbots as the primary mode of communication for customer service activities. The large enterprise segment accounted for the largest market share in 2016 owing to their wide usage in these enterprises. In addition, the segment is also expected to account for the largest market share over the forecast period. However, the medium enterprise segment is expected to grow at the highest CAGR.

Global Chatbot Market by End User, 2016 (%)

Global Chatbot Market

Regional Insights

As North America is a major hub for startups in the chatbot industry, it accounted for the largest market share in 2016. Whereas Asia Pacific, which is a major hub for services industry, follows next. Many large enterprises increasingly adopt chatbots in their routine customer service activities.

The substantial growth prospects of chatbots in various regions can be attributed to significant benefits that it offers to enterprises, such as reduced operating costs, improved customer satisfaction, and enhanced operating efficiency.

Competitive Insights

Key participants in the chatbot industry include Baidu, Poncho, Kik, WeChat, Varo Money Inc., Babylon Health, ReplyYes, and SRI International. In October 2016, Baidu launched an innovative healthcare bot known as Melody. This chatbot uses artificial intelligence to provide doctors with relevant information in order to assist patients with various suitable treatment options.

Report Scope

Attribute

Details

Base year for estimation

2016

Actual estimates/Historical data

2014 - 2015

Forecast period

2017 - 2025

Market representation                                                

Revenue in USD Million and CAGR from 2017 to 2025

Regional scope

North America, Europe, Asia Pacific, South America, and Middle East & Africa

Country scope

U.S., Canada, Mexico, Germany, UK, Japan, China and South Korea

Report coverage             

Revenue forecast, company share, competitive landscape, growth factors, and trends

15% free customization scope (equivalent to 5 analysts working days)

If you need specific market information that is not currently within the scope of the report, we will provide it to you as a part of the customization


Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest trends and opportunities in each of the sub-segments from 2014 to 2025. For this study, Grand View Research has segmented the chatbot market based on end users, applications/business models, types, product landscape, verticals, and regions.

  • End-User Outlook (Revenue, USD Million; 2014 - 2025)

    • Small Enterprises

    • Medium Enterprises

    • Large Enterprises

  • Application/Business Model Outlook (Revenue, USD Million; 2014 - 2025)

    • Bots for Service

    • Bots for Social Media

    • Bots for Payments/Order processing

    • Bots for Marketing

    • Others

  • Type Outlook (Revenue, USD Million; 2014 - 2025)

    • Standalone

    • Web-based

    • Messenger-based/Third party

  • Product Landscape Outlook (Revenue, USD Million; 2014 - 2025)

    • Artificial intelligence

    • Marketing

    • Human intelligence

  • Vertical Outlook (Revenue, USD Million; 2014 - 2025)

    • Healthcare

    • Retail

    • Banking, Financial Services, and Insurance (BFSI)

    • Media and entertainment

    • Travel & Tourism

    • E-commerce

    • Others

  • Regional Outlook (Revenue, USD Million; 2014 - 2025)

    • North America

      • U.S.

      • Canada

      • Mexico

    • Europe

      • Germany

      • UK

    • Asia Pacific

      • China

      • Japan

      • South Korea

    • South America

      • Brazil

      • Rest of South America

    • MEA

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