Conversational AI Market

Report Scope & Overview:

The Conversational AI Market size was valued at USD 7.44 Bn in 2022 and is expected to reach USD 43.16 Bn by 2030, and grow at a CAGR of 24.56% over the forecast period 2023-2030.

Conversational AI is concerned with the use of speech-based help, chatbots to automate conversation, messaging applications, and the creation of personalized customer experiences. Conversational AI is a type of AI that allows individuals to engage with programs, websites, and gadgets on a daily basis using voice, text, touch, or gesture information. It is extremely important in open contacts and personal help tasks.

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Natural language understanding (NLU) and machine learning (ML) breakthroughs in AI applications let businesses expand exponentially with clear information. Conversational AI allows people to communicate quickly using their own vocabulary or phrases, and it provides organizations with a method to connect with customers through customized contact while receiving an unprecedented quantity of critical business information. Not only will this boost consumer happiness, but it will also provide a massive quantity of actionable data.

To do this, organizations must verify that conversational chatbots correctly interpret the meaning and mood of the discussion. That the conversational AI system can link smoothly with back-end data and third-party databases to enable more personalized interactions. Consumers are already utilizing conversational AI platforms to communicate with friends and family instead of email, text messages, and phone calls. Nowadays, younger generations, in particular, prefer texting over traditional forms of communication. Not only that but many social events are being organized using messaging apps and regular texting, which is giving birth to more useful and secure messaging apps.

MARKET DYNAMICS:

KEY DRIVERS:

• The need for AI-powered customer support services is growing.

• Reduced chatbot development costs and omnichannel deployment.

• Rising need for AI-powered chatbots to keep people connected and informed.

• Increased emphasis on customer involvement.

RESTRAINTS:

• Unawareness of conversational AI solutions.

• Inability to identify and respond to customer intent.

OPPORTUNITY:

• Integration of sophisticated artificial intelligence capabilities to enhance existing conversational AI services.

• Online buying is becoming increasingly popular.

CHALLENGES:

• Chatbots and virtual assistants are inaccurate.

IMPACT OF COVID-19:

The COVID-19 outbreak accelerated the expansion of conversational artificial intelligence-based technologies, such as conversational bots, in 2020 and is predicted to continue at a very high rate through the end of 2021. However, the industry was primarily impacted by various difficulties generated by the COVID-19 pandemic, such as a shortage of trained personnel availability along with global partial or total lockdown. In contrast, the increased usage of chatbot solutions in the healthcare, retail & e-commerce, and telecommunications industries is propelling the conversational AI market over the projection period.

MARKET ESTIMATION:

In 2022, the solutions category had the highest revenue share. Companies' large-scale use of in-house conversational AI technology accounts for the lion's share. Managed services and professional services are expected to increase rapidly throughout the projection period. The services are critical to the operation of conversational AI systems. Human relationships are frequently difficult due to the diversity and richness of human languages. Many organizations provide diverse and huge training datasets for a chatbot that may be used to train chatbots to detect different ways individuals communicate the same objective.

In terms of revenue, the chatbots category had a commanding position in 2022. Because of its potential to play a key role in customer assistance, the category is expected to maintain its dominance during the projected period. They are mostly used for data collection. Customers may also interact with chatbots to get clarification on any product or service or to schedule appointments. With the rising penetration of Natural Language Processing (NLP) and AI technology breakthroughs, businesses are increasingly capable of extending services, installing intelligent assistants, and combining tasks with a variety of different platforms. There is enormous potential for incorporating new developments, such as gesture detection, into conversational AI services.

In terms of revenue, the on-premise category was the clear winner in 2022. This is owing to the customer's flexibility, which allows the transaction to be completed only once. The prices are significantly lower than the consumer's cloud expenditures. Because of the growing importance of cloud-based technologies and services in organizations throughout the world, the cloud segment is expected to rise rapidly over the forecast period.

In 2022, the Natural Language Processing category had the highest revenue share. Large amounts of natural language data may be processed using NLP. It also allows for the simplification of documentation procedures to improve efficiency and documentation accuracy. Businesses' attention has shifted away from providing customer care via SMS or emails and toward AI-enhanced chatbots. These chatbots help businesses enhance customer engagement and experience. NLP technology is used by AI-enabled chatbots to help consumers and perform human-like conversations in real-time. They help organizations get business information about purchasing patterns, consumer preferences, and views, allowing them to provide more personalized experiences and proactive suggestions based on their account activity.

In 2022, retail and e-commerce had the highest revenue share. Retail and e-commerce sectors may better serve customers by using compelling, expressive, and intelligent conversational AI tools and strategies. The BFSI segment is predicted to increase significantly over the forecast period due to a variety of factors such as the use of AI chatbots in the financial and banking services industry, which are utilized to aid consumers in making secure payments and participating in communication. The automobile industry will expand the most throughout the projection period. AI voice assistants can provide car controls, notifications, real-time recommendations, and much more to passengers and drivers, making regular commutes more convenient.

KEY MARKET SEGMENTS:

On The Basis of Component

• Solutions

• Managed Services

• Professional Services

On The Basis of Type

• Chatbots

• Intelligent virtual assistant

On The Basis of Deployment

• Cloud

• On-premise

On The Basis of Technology

• Natural Language Processing

• ML and Deep Learning

• Automatic Speech Recognition

On The Basis of End-user

• BFSI

• Healthcare

• IT and Telecom

• Retail and eCommerce

• Education

• Media and Entertainment

• Automotive

• Others

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REGIONAL ANALYSIS:

The North American region dominates the worldwide Conversational AI Market, owing to the increased need for improving customer support services in order to boost customer retention activities. Furthermore, the growing number of companies across various countries is likely to fuel the conversational AI market. Furthermore, the APAC Conversational AI Market has gained traction as a result of increased development and implementation of solutions throughout the APAC region. The European Union is also likely to be the second-largest market in terms of size throughout the forecast period. The increased need to minimize business tasks associated with customer engagement and retention is driving the adoption of conversational AI solutions in Europe.

REGIONAL COVERAGE:

• North America

  • USA

  • Canada

  • Mexico

• Europe

  • Germany

  • UK

  • France

  • Italy

  • Spain

  • The Netherlands

  • Rest of Europe

• Asia-Pacific

  • Japan

  • south Korea

  • China

  • India

  • Australia

  • Rest of Asia-Pacific

• The Middle East & Africa

  • Israel

  • UAE

  • South Africa

  • Rest of Middle East & Africa

• Latin America

  • Brazil

  • Argentina

  • Rest of Latin America

KEY PLAYERS:

The major key players are Amazon Web Services, Inc., Artificial Solutions Holding ASH AB, Baidu, Inc., Conversica Inc., Haptik, IBM Corporation, Microsoft Corporation, Oracle Corporation, Google LLC, SAP ERP and Other Players.

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