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The conversational AI market share is expected to increase by USD 1.14 billion from 2021 to 2026, and the market’s growth momentum will accelerate at a compound annual growth rate (CAGR) of 21.6%. The growth of the market depends on factors such as growth in natural language processing (NLP), machine learning (ML), and AI technologies, and increasing need for customer engagement.
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The growth in natural language processing (NLP), machine learning (ML), and AI technologies is notably driving the market's growth, although factors such as resistance to using chatbots may impede the market. The holistic analysis of the drivers will help in deducing end goals and refining marketing strategies to gain a competitive edge.
The growth in natural language processing (NLP), machine learning (ML), and AI technologies are some of the key factors driving the market. AI, also known as machine intelligence, is a technology that has grown significantly in the past decade and is now capable of developing computers and robots that can explain data contextually to provide the requested information, data analysis, or trigger activities based on the findings. Through ML and neural network techniques, companies across the globe are investing in teaching machines to think more like humans. AI helps reduce human errors, creating more precise analytic models, and turning data-collecting devices into powerful analytic tools. Apart from connecting companies and customers, such technologies can be applied to make customer services more efficient during purchase as well as post-purchase activities. Advances in AI approaches have led to the development of applications that are built with AI/ML algorithms, which aim at finding meaningful insights easily for analysts and users. These factors will positively impact the growth of the market during the forecast period.
The increasing need for customer engagement will fuel the market. A major factor driving the market is the increasing demand for AI-powered customer support services. With tightening market competition, it is becoming even more important for companies to maintain their customer base and continue adding new customers. To gain customer loyalty, it is very important for companies to keep customer services more engaging and have a constant touchpoint to maintain that contact. It is easier to sell to an existing customer than to gain a new customer, which makes it important for businesses to provide a good post-purchase experience as that can act as a lead for the next purchase. Nowadays, investments in AI, NLP, and ML are increasing and have widened the scope for providing effective chatbots and voiceover software applications for Internet users. The applications of chatbots range from the automation of front-line call centers to providing virtual assistance on products and FAQs. In the long run, they help companies in reducing their operational expenses. Such benefits are making various organizations adopt chatbots and other such applications, which will drive the growth of the global market during the forecast period.
Resistance to using chatbots is a major challenge to the global market. The lack of accuracy in chatbots, along with technical issues in their integration, is leading to resistance from many end-users and customers, thus posing a challenge to the market. Consumers have shown concerns over companies quickly moving to chatbots to reduce costs, as it makes it harder to interact with actual representatives when needed. The technical challenges faced during the deployment of chatbots and virtual assistants (VAs) are also major challenges for enterprises, leading to resistance. Especially in an unstructured conversation, chatbots find more difficulty in interpreting and providing answers in different languages. Business customers also have reportedly highlighted some of the very important aspects of using chatbots, including bots redirecting users to frequently asked questions (FAQs) that have already been referred to and have not been helpful. Other concerns that are commonly highlighted by customers include that the conversation feels impersonal, and the issues are so complex that a bot is not helpful and needs human assistance. The above factors will hinder the market growth during the forecast period.
This market research and growth report also provides detailed information on other upcoming trends and challenges that will have a far-reaching effect on market growth. The actionable insights on the trends and challenges will help companies evaluate and develop strategies for 2022-2026.
The market growth and trends report analyzes the market’s competitive landscape and offers information on several market companies, including:
This statistical study of the market encompasses successful business strategies deployed by the key companies. The market is fragmented, and the companies are deploying organic and inorganic strategies to compete in the market.
The vendor profiles are designed to help clients improve their market position and information on production and sustainability along with this the market research report provides a detailed analysis of several leading companies.
Our In-house experts produce extensive information on the value chain and parent market of the market, which companies can leverage to gain a competitive advantage during the forecast period. The Value Chain information provides an end-to-end understanding of product insight and profit and also the optimization and evaluation of business strategies The players across the value chain includes selective data and analysis from entire research findings as per the scope of the market growth and forecasting report.
The value chain of the global IT software market includes the following core components:
The market forecasting report has further elucidated other innovative approaches being followed by service providers to ensure a sustainable market presence.
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33% of the market’s growth will originate from North America during the forecast period. The US and Canada are the key markets for the market in North America. The market in this region will be slower than the growth of the market in other regions.
The growth in natural language processing (NLP), machine learning (ML), and AI technologies will facilitate the market's growth in North America over the forecast period. This market growth analysis report entails detailed information on the competitive intelligence, marketing gaps, and regional opportunities in store for companies, which will assist in creating efficient business plans.
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The market share growth by the on-premise segment will be significant during the forecast period. One of the major drivers for the growth of the segment is the increasing need for security. Buyers want to have complete control over their hardware and software. Thus, they prefer on-premises AI infrastructure over cloud-based AI infrastructure. Many major clients across the world require AI infrastructure to be installed on-premises. This increases the security level of the data that is being processed. Several firms are adopting on-premises AI.
This market trends and analysis report provides an accurate prediction of the contribution of all the segments to the growth of the market size and actionable market insights.
The conversational AI market experiences a surge in demand, driven by factors like rising chatbot development costs and omnichannel deployment. AI-powered messaging, including speech-based apps, caters to diverse platforms like mobile and web applications. Hybrid models combining generative and discriminative methods enable tasks like picture classification and language translation. Development initiatives focus on enterprise use cases, enhancing generative AI businesses for human-like responses and conversational context.
Public sector organizations prioritize digital transformation to improve citizen experience, especially among digital native populations. Cognitive competencies streamline the purchase journey across English and regional languages, with solutions like Google Assistant and Bot-in-a-Box dominating the market alongside managed service segments offered by Accenture and Conversational AI Platform providers.
Conversational AI Market Scope |
|
Report Coverage |
Details |
Page number |
120 |
Base year |
2021 |
Forecast period |
2022-2026 |
Growth momentum & CAGR |
Accelerate at a CAGR of 21.6% |
Market growth 2022-2026 |
USD 1.14 billion |
Market structure |
Fragmented |
YoY growth (%) |
21.2 |
Regional analysis |
North America, Europe, APAC, the Middle East and Africa, and South America |
Performing market contribution |
North America at 33% |
Key consumer countries |
US, Canada, China, India, Germany, and Italy |
Competitive landscape |
Leading companies, Competitive Strategies, Consumer engagement scope |
Key companies profiled |
Alphabet Inc., Amazon.com Inc., AmplifyReach India, Artificial Solutions International AB, Avaamo Inc., Baidu Inc., Cognigy GmbH, Conversica Inc., Creative Virtual Ltd., Fidelity National Information Services Inc., Gamut Analytics Pvt. Ltd., Inbenta Holdings Inc., International Business Machines Corp., Jio Haptik Technologies Ltd., Kasisto Inc., Kore.ai Inc., Microsoft Corp., Oracle Corp., Rasa Technologies Inc., SAP SE, and SoundHound Inc |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Five Forces Analysis
5 Market Segmentation by Deployment
6 Customer Landscape
7 Geographic Landscape
8 Drivers, Challenges, and Trends
9 Vendor Landscape
10 Vendor Analysis
11 Appendix
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