Digital Avatar Market Size, Share & Trends Analysis Report By Product (Interactive Digital Avatar, Non-interactive Digital Avatar), By Category, By Industry Vertical, By Region, And Segment Forecasts, 2023 - 2030

Digital Avatar Market Size & Trends

The global digital avatar market size was valued at USD 14.34 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 47.1% from 2023 to 2030. The rising demand for authentic and personalized characters for online interactions by companies from various industries drives the growth of the market. Digital avatars help companies to create engaging and intelligent interactions with customers. Companies in the market for digital avatars offer various customization options. The digital avatar reflects styles and personalities. For instance, in April 2023, Perfect Corp. integrated the AI Magic Avatar feature into the brand’s YouCam Perfect app.

The feature has empowered users to generate more than a hundred personalized digital avatars, allowing them to express themselves across various digital categories. Such digital avatars have become key aspects of digital personas and communications. Technological developments are further projected to play an important role in the overall growth of the market. The incorporation of augmented reality (AR) offers an immersive digital avatar experience. Avatars with AI and AR are increasingly being deployed in customer-facing scenarios, including retail and sales office environments.

For instance, in April 2023, Spheroid Universe, an extended reality metaverse company, launched artificial intelligence (AI) avatars that inhabit the world through AR. Businesses can incorporate digital avatars into various operations, including sales, advertising, consumer interactions, general customer, and more. Further, AI avatars can be integrated with voice synthesis and voice recognition to enhance human interactions and communications.

Product Insights

The interactive digital avatar segment is projected to expand at a CAGR of 49% over the forecast period. The growth is attributed to the rising product adoption in customer service, entertainment, healthcare, and education sectors for various purposes, as they provide more engaging experiences. Furthermore, digital avatars are increasingly being used in animated films and video games to offer personalized experiences. The ability to provide a human-like natural experience is projected to offer lucrative growth opportunities in the market for digital avatars.

A non-interactive digital avatar is not capable of interacting with humans. These digital avatars are implemented in various industry verticals, such as films, video games, and virtual reality experiences. Companies are using non-interactive digital avatars to perform the role of welcome hosts on their websites to describe the products or services and introduce the company. However, ineffectiveness in giving assurance to customers and limited functionalities are expected to hamper the segment's growth over the forecast period.

Industry Vertical Insights

The retail & e-commerce segment accounted for a significant share of around 20% in 2022 in the digital avatar market. Furthermore, it is expected to advance at significant CAGR of 46.2% from 2023 to 2030. E-commerce chatbots are helping the sector to benefit substantially from the power of messaging to drive revenue, enhance consumer experience, and reduce costs by offering 24/7 services.

Furthermore, they help to offer a consistent experience across multiple distribution channels and facilitate better communication. Chatbots are increasingly being deployed in the retail & e-commerce industry for product recommendations to enable personalized service. They assist customers in keeping track of their order status, shipping and billing information, and much more.

The education & training segment is anticipated to grow substantially in the market over the forecast period. Digital avatars are increasingly being implemented in the education and training sector to provide a personalized learning experience. Technological developments enable virtual agents to understand learning preferences, needs, and styles to provide additional resources and personalized recommendations. The increasing adoption of digital avatars for e-learning platforms, online courses, and training programs is projected to offer significant growth opportunities for the market segment.

Category Insights

The virtual influencer segment accounted for a significant market share of 25% in 2022. Virtual influencers enable brands to produce unattainable content with humans, allowing a higher degree of creative freedom which helps to target the correct set of customers. Furthermore, numerous fashion brands collaborate with virtual influencers to create new, unique experiences and attract younger audiences. The ability to generate higher engagement and improved social media reach is projected to fuel further growth of virtual influencers over the forecast period. 

The virtual agents & assistants segment is projected to expand at a CAGR of 44.4% from 2023 to 2030. The assistant is a conversational software that allows brands to respond to customers by using AI, reducing the response time. Companies implement virtual agents on their websites to provide 24/7 assistance and support to enhance customer satisfaction. They can handle multiple customer queries, improving the response time and reducing operational costs. Additional features such as personalization, data collection, and analysis will offer growth opportunities for this segment through 2030.

Regional Insights

The market for digital avatar in the Asia Pacific region is projected to grow at the highest rate of 51.3% during the forecast period. The rising number of smartphone and internet users is driving regional growth. Digital avatar allows people to interact with others on social media platforms without revealing their identity. Furthermore, continuous technological advancements have enabled marketers to create and offer virtual avatars at affordable rates. A steady rise in online gaming and social media users to interact and express themselves is anticipated to fuel further market growth in the region.

The North American region accounted for a significant market share of around 45% in 2022 and is expected to continue its dominance throughout the forecast period. The growing popularity of AR and VR allows users to interact with digital environments in a more realistic and immersive manner. Regional consumers prefer customized digital avatars to reflect their interests and personalities. Furthermore, considering the demand, regional companies also focus on offering customization in digital avatars through in-app purchases and other virtual goods through social media, virtual reality, and gaming.

Key Companies & Market Share Insights

Various companies in the market are investing heavily in research and development activities to offer advanced digital avatar solutions. For instance, in March 2023, Epic Games, Inc., a software and video game developer, launched MetaHuman Animator, a performance and facial animation toolset for their MetaHuman framework. The product is expected to produce high-quality face animation for Hollywood filmmakers and AAA game developers. Market players are also engaged in partnerships and collaborations to increase their market reach and offer more realistic digital avatars. Some of the prominent players in the global digital avatar market include:

• Epic Games, Inc.

• Pinscreen Inc.

• Soul Machines

• NEON (SAMSUNG)

• AI Foundation

• Microsoft Corporation

• NVIDIA Corporation

• UneeQ

• Didimo, Inc.

• Spatial Systems, Inc.

• DeepBrain AI

• Wolf3D

Digital Avatar Market Report Scope

Global Digital Avatar Market Report Segmentation

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global digital avatar market report based on product, category, industry vertical, and region:

• Product Outlook (Revenue, USD Billion, 2018 - 2030)

  • Interactive Digital avatar

  • Non-Interactive Digital avatar

• Category Outlook (Revenue, USD Billion, 2018 - 2030)

  • Virtual Agents & Assistants

  • Virtual Influencers

  • Others

• Industry Vertical Outlook (Revenue, USD Billion, 2018 - 2030)

  • BFSI

  • Retail & E-commerce

  • Healthcare

  • Gaming & Entertainment

  • Education & Training

  • Automotive

  • IT & Telecom

  • Others

• Regional Outlook (Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • UK

    • Germany

    • France

    • Italy

    • Spain

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

    • Australia

  • Latin America

    • Mexico

    • Brazil

  • Middle East & Africa

    • Saudi Arabia

    • UAE