The Global Conversational AI Market is Expected to Grow from 4.8 Billion in 2020 to USD 13.9 Billion by 2025, at a Compound Annual Growth Rate (CAGR) of 21.9% During the Forecast Period.
Increasing demand for AI-powered customer support services, omnichannel deployment, and reduced chatbot development cost to drive the growth of Conversational AI market
The upcoming trend of customer engagement through social media platforms and increasing integration of advanced AI capabilities are the major factors adding value to the conversational AI offerings, which is expected to provide opportunities for enterprises operating in various verticals in the conversational AI market. The lack of accuracy in chatbots and virtual assistants is a major challenge in the conversational AI market. Moreover, the lack of awareness of conversational AI acts as a key restraining factor in the market.
As the COVID-19 or coronavirus crisis has dragged on, understaffed government agencies, grocery stores, and financial services have all scrambled to set up chatbots and other conversational AI solutions for handling a new influx of calls. IBM witnessed a 40% increase in traffic to Watson Assistant from February to April of this year. In April, Google launched the Rapid Response Virtual Agent, a special version of its Contact Center AI, and lowered the price of its services in response to client demand. While call centers have long been a frontier of workplace automation, the pandemic has accelerated the process.
Organizations under pressure are more willing to try new tools. AI firms that are keen on taking advantage of the situation are sweetening the incentives. Over the last few years, advances in NLP have also dramatically improved on the clunky automated call systems of the past. The latest generation of chatbots and voice-based agents are easier to build, faster to deploy, and more responsive to user inquiries. Once adopted, in other words, these systems are most likely to stay, proving their value through their ease of use and affordability.
Among the services, the training and consulting services segment is expected to account for the higher market share during the forecast period
By service, the market size of the training and consulting segment is expected to be the largest during the forecast period. Consulting services include highly qualified industry experts, security professional, and domain experts to help and motivate organizations in minimizing risks, preventing revenue losses, and upgrading the existing conversational AI solutions in the market.
Consulting services primarily focus on managing the operations revolution programs and the latest technology updates to help the client achieve strategic business goals through technical and professional improvements. Technology consulting helps the client achieve strong business mechanism and decision-making. Nowadays, several enterprises are fully aware of AI capabilities, the supremacy they can offer, and how they can transform the business processes to add more value.
Among the type of conversational AI platforms and solutions, the Intelligent Virtual Assistants (IVA)segment to record the higher growth rate during the forecast period
In the conversational AI market by type, the Intelligent Virtual Assistants (IVA) segment is expected to record the higher CAGR during the forecast period. The growth is attributed to the increasing demand for IVA among enterprises for proving customers better and personalized experience, thus strengthening customer engagement and retention imperatives. IVA utilizes advanced NLP, NLU, and dialog management techniques to achieve high levels of automation without sacrificing accuracy.
With the help of IVA, complex customer queries can be handled effectively. It consists of an advanced dialogue management engine so that users can get full control over the conversational flow. Virtual assistants are, therefore, also capable of understanding customers' intent, regardless of the order in which the data is given throughout the conversation. Virtual agents are designed to provide customer services, product information, marketing, support, sales, order placing, reservations, and other custom services.
Among regions, APAC to grow at the highest CAGR during the forecast period
APAC is expected to grow at the highest CAGR during the forecast period. The major factors fueling the growth of the conversational AI market in APAC are the increasing amount of business data across verticals in this region and growing need to resolve customer queries in real-time and offer omnichannel customer experience in China, Japan, Australia, and India. These countries are leveraging information-intensive AI technologies, and conversational AI is one of the leading technology trends.
IBM, Microsoft, Google, and AWS account for the majority of shares in the conversational AI market in this region. The region has the presence of several other significant conversational AI solution providers. SMEs and large enterprises in the APAC region have become more aware of government regulations and compliances and started adopting AI-based solutions proactively. The adoption of AI technology by different verticals such as BFSI, travel &hospitality, and retail is expected to contribute to the high growth of the conversational AI market.
Key Topics Covered
2 Research Methodology
3 Executive Summary
4 Premium Insights 4.1 Attractive Market Opportunities in the Conversational AI Market 4.2 Conversational AI Market: Top Three Applications 4.3 Conversational AI Market, by Region 4.4 Conversational AI Market in North America, by Service and Technology
5 Market Overview and Industry Trends 5.1 Introduction 5.2 Market Dynamics 5.2.1 Drivers 184.108.40.206 Increasing Demand for AI-Powered Customer Support Services 220.127.116.11 Omnichannel Deployment and Reduced Chatbot Development Cost 18.104.22.168 Rising Demand for AI-Based Chatbots to Stay Connected and Informed During the COVID-19 Pandemic 5.2.2 Restraints 22.214.171.124 Lack of Awareness About Conversational AI Solutions 5.2.3 Opportunities 126.96.36.199 Rise in Customer Engagement Through Social Media Platforms 188.8.131.52 Integration of Advanced AI Capabilities to Add Value to Existing Conversational AI Offerings 5.2.4 Challenges 184.108.40.206 Lack of Accuracy in Chatbots and Virtual Assistants 220.127.116.11 Maintaining Business Continuity During the COVID-19 Pandemic 5.3 Cumulative Growth Analysis 5.4 Adjacent/Related Markets Snapshot 5.5 Use Cases 5.6 Regulatory Implications 5.6.1 Introduction 5.6.2 General Data Protection Regulation 5.6.3 Health Insurance Portability and Accountability Act 5.6.4 Payment Card Industry Data Security Standard 5.6.5 Financial Industry Regulatory Authority 5.6.6 Service Organizational Control 5.6.7 Markets in Financial Instruments Directive II 5.7 Conversational AI, Architecture
6 Conversational AI Market: COVID-19 Impact
7 Conversational AI Market, by Component 7.1 Introduction 7.2 Platform 7.3 Services
8 Conversational AI Market, by Type 8.1 Introduction 8.2 Intelligent Virtual Assistants 8.3 Chatbots
9 Conversational AI Market, by Technology 9.1 Introduction 9.2 Machine Learning and Deep Learning 9.3 Natural Language Processing 9.4 Automated Speech Recognition
10 Conversational AI Market, by Deployment Mode 10.1 Introduction 10.2 Cloud 10.3 On-Premises
11 Conversational AI Market, by Application 11.1 Introduction 11.2 Customer Support 11.3 Personal Assistant 11.4 Branding and Advertisement 11.5 Customer Engagement and Retention 11.6 Onboarding and Employee Engagement 11.7 Data Privacy and Compliance 11.8 Others
12 Conversational AI Market, by Vertical 12.1 Introduction 12.2 Banking, Financial Services, and Insurance 12.3 Retail and Ecommerce 12.4 Healthcare and Life Sciences 12.5 Travel and Hospitality 12.6 Telecom 12.7 Media and Entertainment 12.8 Others
13 Conversational AI Market, by Region 13.1 Introduction 13.2 North America 13.3 Europe 13.4 Asia-Pacific 13.5 Middle East and Africa 13.6 Latin America
14 Competitive Landscape 14.1 Competitive Leadership Mapping 14.1.1 Visionary Leaders 14.1.2 Innovators 14.1.3 Dynamic Differentiators 14.1.4 Emerging Companies 14.2 Strength of Product Portfolio 14.3 Business Strategy Excellence 14.4 Market Ranking Analysis, by Company
15 Company Profiles 15.1 Google 15.2 Microsoft 15.3 AWS 15.4 IBM 15.5 Oracle 15.6 Nuance 15.7 Baidu 15.8 SAP 15.9 Artificial Solutions 15.10 Kore.ai 15.11 Avaamo 15.12 Conversica 15.13 Haptik 15.14 Rasa 15.15 Solvvy 15.16 Pypestream 15.17 Inbenta 15.18 Rulai 15.19 Creative Virtual 15.20 Saarthi.ai 15.21 FIS 15.22 Amplifyreach 15.23 Interactions 15.24 Quosphere 15.25 Exceed.ai 15.26 Cognigy 15.27 Soundhound Inc. 15.28 Kasisto 15.29 Mindsay 15.30 Clinc