A2P Messaging Market Size, Share & Trends Analysis Report By Component, By Deployment Mode, By Enterprise Size, By SMS Traffic, By Application, By Vertical, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global A2P messaging market size was estimated at USD 66.84 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 4.9% from 2023 to 2030. The market growth is attributed to the increasing adoption of mobile devices and smartphones worldwide. This widespread usage has created a large user base for application-to-person (A2P) messaging, which businesses are now leveraging to reach customers effectively. The demand for personalized and targeted communication further drives market growth. As businesses recognize the value of customized messages that resonate with individual recipients, customer engagement enhances, leading to higher conversion rates. The market is gaining importance, particularly concerning secure & transactional messages like two-factor authentication (2FA) and account verification.

This growing significance is due to the need for reliable channels to deliver time-sensitive and confidential information securely. As businesses embrace these emerging trends, such as Rich Communication Services (RCS) and chatbots, A2P messaging is being transformed into interactive and dynamic communication experiences. These advancements in messaging technologies are paving the way for further expansion and innovation within the market. The market is witnessing a rise in adopting A2P messaging for business communications, driven by a desire to enhance customer experience. Businesses acknowledge the extensive reach and immediate nature of A2P messaging.

With many people owning mobile devices worldwide, A2P messaging offers a direct and efficient means of connecting with customers and employees. By customizing messages based on individual preferences and behaviors, businesses can increase engagement and conversion rates. Furthermore, integrating A2P messaging with other communication channels like email and social media is becoming increasingly common. This multi-channel approach ensures a unified and consistent customer experience across various touchpoints. The role of e-commerce in driving the demand for the market is pivotal. As online shopping grows rapidly and more e-commerce platforms emerge, businesses and customers require efficient communication.

A2P messaging enables e-commerce businesses to send timely updates, notifications, and confirmations directly to customers' mobile devices, ensuring a convenient shopping experience. Moreover, A2P messaging serves as a valuable tool for marketing and customer engagement in the e-commerce sector. Businesses effectively leverage it to send promotional offers, discount codes, and personalized recommendations, fostering customer retention and loyalty. By delivering targeted and relevant messages, e-commerce companies can effectively reach their customer base, resulting in increased sales and higher satisfaction levels.

With the rising number of people subscribing to mobile services, the market is witnessing substantial growth. This worldwide phenomenon is primarily caused by the widespread adoption of mobile devices and the expansion of cellular networks. As a consequence, A2P messaging services have garnered a wide range of users as businesses and organizations acknowledge the immense potential of this mode of communication. As the number of individuals acquiring mobile devices and utilizing cellular networks increases, the influence and outreach of A2P communications continue to expand.

COVID-19 Impact Analysis

Businesses and individuals have greatly altered their behaviors and desires due to the COVID-19 pandemic, which has consequently affected the supply chain and customer service. Lockdowns and distance mandates have prompted a move toward digital communication platforms. Consequently, A2P messaging has become a crucial method for companies to interact effectively with and attract their clientele. Utilizing A2P messaging, businesses can deliver crucial notifications and safety updates. This surge in digital dependency has had a beneficial impact on the market. A2P messaging has been playing an important part in supporting the rise of online shopping and the increased need for delivery services due to the pandemic. It has proved invaluable in ensuring that customers receive confirmations for their orders, stay updated on delivery progress, and have access to real-time tracking information.

Component Insights

The platform segment dominated the overall market in 2022 and accounted for a share of over 61.0% in 2022 and is expected to witness a CAGR of 4.4% during the forecast period. The demand for cloud-based A2P messaging platforms is on the rise, driving the growth of this segment. Businesses are increasingly embracing cloud solutions due to their scalability, flexibility, and cost-effectiveness. By adopting cloud platforms, businesses can seamlessly integrate A2P messaging capabilities into their existing infrastructure while ensuring reliable global reach and the ability to scale according to messaging volumes. Moreover, a growing trend is observed in omnichannel A2P messaging platforms. As customers engage with businesses across multiple channels like SMS, chat apps, and social media, integrated platforms are needed to effectively manage A2P messaging across these communication channels.

Omnichannel platforms empower businesses to deliver consistent and personalized messaging experiences, resulting in a unified customer journey and improved customer engagement. The A2P SMS services segment is anticipated to witness the fastest CAGR of over 5.0% throughout the forecast period. The segment’s growth is fueled by the increasing demand for value-added services in A2P messaging. Businesses are now seeking comprehensive service packages that go beyond simple message delivery. These additional services, such as message personalization, interactive messaging campaigns, chatbot integration, analytics, reporting, and customer journey optimization, facilitate enhanced customer e­ngagement, improved conversion rates, and actionable insights from A2P messaging campaigns.

Deployment Mode Insights

The cloud segment dominated the overall market in 2022 with a revenue share of over 57.0% in 2022 and is expected to witness a CAGR of 5.6% during the forecast period. The demand for cloud-based A2P messaging platforms and services is increasing rapidly due to their inherent scalability, resulting in significant segment growth. Businesses are progressively adopting cloud solutions to leverage the advantages of scalability, flexibility, and cost-effectiveness. By integrating A2P messaging capabilities into their existing infrastructure through cloud-based platforms, businesses enjoy high reliability, global reach, and seamless scalability to accommodate diverse messaging volumes. Furthermore, cloud deployments allow companies to harness the benefits of Infrastructure­as-a-Service (IaaS) and Platform-as-a-Service­ (PaaS) models, reducing hardware investments and minimizing maintenance complexities.

The on-premises segment is projected to witness significant growth over the forecast period.The demand for on-premise A2P messaging solutions remains strong in industries where data security and compliance are of paramount importance. This is a crucial factor fueling the growth of this segment. Various organizations, including government institutions, financial services providers, and healthcare facilities, have a preference for maintaining their messaging infrastructure within their own premises. They do so to uphold strict control over data privacy and meet industry-specific regulations effectively. In addition, hybrid deployments that combine on-premise and cloud-based A2P messaging solutions have gained popularity in this segment. Such hybrid deployments enable businesses to strike a balance between maintaining data control while also ensuring scalability.

Enterprise Size Insights

The large enterprises segment dominated the overall market in 2022 and accounted for a share of over 61.0% of the overall revenue. Large enterprises are leveraging A2P messaging to deliver tailored and contextually relevant messages to their customers. By analyzing customer data and behavior, these enterprises can create personalized messaging experiences that enhance customer engagement, drive conversions, and build brand loyalty. Large enterprises understand the importance of meeting customers on their preferred communication channels, be it SMS, chat apps, social media, or voice. By adopting omnichannel messaging, enterprises can engage customers across multiple touchpoints and provide consistent messaging, thereby contributing to the growth of the segment.

The small & medium enterprises (SMEs) segment is expected to grow at the highest CAGR during the forecast period. SMEs commonly rely on A2P messaging to promote their products, provide updates, and engage in promotional activities. A2P messaging platforms play a crucial role in product development, allowing enterprises to advertise new product launches and enhance brand recognition effectively. As a result of its cost-effectiveness and efficient communication capabilities, A2P messaging is expected to see increased adoption among SMEs in the near future. This technology provides SMEs with a low-cost and efficient means of reaching many potential customers, making it an attractive option for expanding their customer base.

SMS Traffic Insights

The national segment dominated the market in 2022 and accounted for more than 55.0% share of the global revenue. Growing emphasis on real-time communication and operational efficiency in the aviation industry is a significant factor contributing to the growth of the segment. National air traffic authorities and service providers are increasingly adopting A2P messaging to streamline communication with airlines, pilots, ground staff, and other stakeholders. SMS serves as a reliable and immediate channel for transmitting critical information, such as flight updates, weather conditions, safety alerts, and operational changes. This trend is driven by the need to enhance the efficiency of air traffic management, improve flight safety, and ensure seamless coordination among various entities within the national airspace.

The cross-border segment is projected to grow at the highest CAGR over the forecast period. The segment growth can be attributed to the significant increase in international business and global connectivity, leading to a growing need for cross-border communication. Businesses are expanding their operations across borders, and cross-border SMS messaging provides a reliable and efficient means of communication with customers, partners, and suppliers in different countries. This trend is driven by the need to establish global reach, enhance customer engagement, and facilitate seamless international transactions.

Application Insights

The CRM segment dominated the overall market with a revenue share of over 30.0% in 2022.The increase in segment growth can be credited to the rising trend of combining A2P messaging with CRM systems to improve customer service and support. A2P messaging is being utilized by businesses to offer immediate aid, self-service choices, and efficient resolutions to customer inquiries. Businesses are strategically using A2P messaging in their CRM strategies to send personalized messages, including transactional notifications, order updates, and appointment reminders. Through the integration of A2P messaging with CRM systems, businesses can automate and streamline customer interactions, ultimately building stronger relationships and increasing customer satisfaction.

Organizations are leveraging A2P messaging to reach their target audience with tailored promotional content, fostering customer engagement and brand loyalty. For instance, leading e-commerce platforms are utilizing A2P messaging to send exclusive discount codes to their subscribers, resulting in increased sales and customer retention. This trend reflects a shift toward personalized marketing strategies, as businesses recognize the efficiency of A2P messaging in delivering time-sensitive offers and discounts. Moreover, the integration of advanced analytics tools enables better campaign tracking and optimization, ensuring higher conversion rates. As this trend continues, further innovation is anticipated in message formats and delivery mechanisms, enhancing the overall effectiveness of promotional campaigns within the market.

Vertical Insights

The BFSI segment dominated the market in 2022 and accounted for a revenue share of over 28.0% in 2022. The growth of the BFSI segment can be attributed to the increasing volume of payment transactions and the rising adoption of online A2P messaging within the BFSI industry. Financial institutions and banks are leveraging A2P messaging to facilitate various communication needs, including balance statements, payment reminders, notifications, one-time passwords, and anti-fraud alerts. By utilizing an A2P messaging system to communicate transaction information, consumer actions, and retail banking operations, these institutions can effectively connect with their clients and establish strong customer relationships.

The proliferation of smartphones and the expanding user base of the internet have led to the growing demand for swift services from tech-savvy customers. As a result, an increasing number of banks and financial institutions are adopting A2P messaging to cater to these customer expectations. The media & entertainment segment is anticipated to witness the fastest growth rate during the forecast period. The increasing focus on monetization opportunities through A2P messaging is a significant factor contributing to the growth of the segment. Media and entertainment companies are exploring innovative ways to generate revenue through A2P messaging channels.

This includes offering premium content subscriptions, exclusive access to events or releases, and interactive contests or quizzes that require paid participation. Media and entertainment companies are leveraging A2P messaging to deliver personalized content updates, promotional offers, event notifications, and interactive experiences to their audiences. By incorporating features, such as rich media messaging, video links, and voting options, businesses can create immersive and participatory experiences that enhance audience engagement and drive loyalty.

Regional Insights

The Asia Pacific region dominated the overall market in 2022 with a share of over 43.0% of the overall revenue. With a large population and increasing internet connectivity, the Asia Pacific region presents immense opportunities for A2P messaging services. Businesses are capitalizing on this trend by leveraging A2P messaging to reach a vast consumer base, deliver time-sensitive information, and engage with customers directly and personally. In addition, there is a growing emphasis on mobile commerce and digital payments in the Asia Pacific region. A2P messaging is playing a vital role in facilitating secure and convenient payment transactions, providing one-time passwords (OTPs) for authentication, and delivering payment notifications to customers.

North America is expected to witness a significant CAGR of 2.8% over the forecast period. Retailers and e-commerce platforms in North America are leveraging A2P messaging to send customers order confirmations, delivery updates, and promotional offers, thereby enhancing their shopping experiences. In addition, healthcare providers are utilizing A2P messaging for appointment reminders, prescription notifications, and patient communications, streamlining processes and improving patient engagement. Furthermore, there is increasing integration of A2P messaging with other communication channels and technologies. By incorporating A2P messaging into their omnichannel marketing strategies, businesses can create a cohesive and consistent brand experience across multiple touchpoints.

Key Companies & Market Share Insights

The market is characterized by fragmentation and is expected to experience intensified competition as numerous players operate within it. Key market players are actively engaging in collaborations with telecom operators, advertisers, as well as local and regional entities. By forming strategic partnerships, they aim to gain a competitive advantage over their counterparts and secure a substantial market share. Companies are implementing several other strategies to secure a substantial industry share.

For instance, in March 2023, DIDWW, a global provider of high-quality VoIP communications and SIP trunking services to businesses and operators worldwide, extended the coverage of its A2P SMS service featuring alphanumeric sender IDs. By incorporating 21 additional European countries, DIDWW can now offer its customers enhanced capabilities to send SMS messages with a sender ID that aligns with their brand name. This expansion aims to boost brand recognition and foster increased customer engagement for DIDWW’s clientele. Some of the prominent players in the global A2P messaging market include:

• Twilio Inc.

• Dialogue Communications

• Infobip Ltd.

• Sinch

• Proximus

• Tata Communications

• AT&T Inc.

• China Mobile Ltd.

• Orange S.A.

• Genesys

A2P Messaging Market Report Scope

Global A2P Messaging Market Report Segmentation

This report forecasts revenue growths at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global A2P messaging market report based on component, deployment mode, enterprises, SMS traffic, application, vertical, and region:

• Component Outlook (Revenue, USD Billion, 2017 - 2030)

  • Platform

  • Service

• Deployment Mode Outlook (Revenue, USD Billion, 2017 - 2030)

  • On-premise

  • Cloud

• Enterprise Size Outlook (Revenue, USD Billion, 2017 - 2030)

  • Large Enterprises

  • Small & Medium Enterprises

• SMS Traffic Outlook (Revenue, USD Billion, 2017 - 2030)

  • National

  • Cross-border

• Application Outlook (Revenue, USD Billion, 2017 - 2030)

  • Pushed Content Services

  • Interactive Services

  • Promotional Campaigns

  • Customer Relationship Management (CRM) Services

  • Others

• Vertical Outlook (Revenue, USD Billion, 2017 - 2030)

  • BFSI

  • Healthcare

  • Media & Entertainment

  • Retail & E-commerce

  • Travel & Tourism

  • Others

• Regional Outlook (Revenue, USD Billion, 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • UK

    • Germany

    • France

  • Asia Pacific

    • China

    • Japan

    • India

  • South America

    • Brazil

  • Middle East & Africa