The Global Conversational AI Market size is expected to reach $15.6 billion by 2027, rising at a market growth of 16.8% CAGR during the forecast period. Conversational AI helps in the usage of speech-based assistance, chatbots in order to automate communication and to create personalized customer experiences. In addition, conversational AI is a type of AI, which enables users to communicate with devices, applications, and websites every day using voice, touch, text, or gesture information. It is one of the most important components in open interactions and personal assistance activities.
By adopting advanced AI applications using machine learning (ML) and natural language understanding (NLU), companies can get the support for their business to expand at an exceptional pace with direct information. Additionally, conversational AI enables better and faster interaction for the users by utilizing their own terminology or words and for companies. It also provides a way to create a connection of the enterprises with their customers via customized interaction and get an exceptional volume of crucial business data. This is expected to improve customer satisfaction and also generate more actionable insights for the companies.
The conversational AI market is estimated to witness significant revenue growth in the coming years due to the growing customer engagement via social networking sites. Over the past few years, social networking websites like Facebook, Instagram, Snapchat, LinkedIn, WhatsApp, and Twitter have witnessed a significant deployment of conversational AI solutions, which is expected to accelerate the market growth.
COVID-19 Impact Analysis
With the outbreak of the COVID-19 pandemic, the growth of conversational AI-based technology like conversational bots has increased to a great extent. The pandemic is expected to further positively impact the overall growth of the global conversational AI market in the forecast period. Although, the initial phase of the pandemic has brought various obstacles in the business domain due to the low availability of a skilled workforce, imposition of lockdown restrictions and travel ban. Conversely, the adoption of chatbot solutions within various verticals like retail & e-commerce, healthcare, and telecommunication industries has increased during the pandemic, which is expected to propel the growth of the conversation AI market during the forecast period.
Market Growth Factors:
Growing demand for AI-based customer support services is expected to augment the market growth
The term ‘customer services' has evolved a lot in the last few years, and currently, it is not restricted to only customer call centers wherein, customers call and interact with the company executive for their problems. The emergence of various platforms and better channels has opened several opportunities for companies to interact with their customers and enhance the customer experience. Companies are increasingly adopting conversational AI solutions to provide better customer services. The shifting focus of the companies from offering customer support services via emails or messages to AI-based chatbots is assisting companies to improve customer experience and engagement.
Increasing customer engagement via social media platforms
The growing popularity of various social media platforms like Twitter, Facebook, Telegram, Skype, Tumblr, Kik, and WeChat is motivating companies to increase their presence on these platforms to enable better customer interaction. In addition, the popularity of social media platforms has contributed to the high adoption of conversational AI solutions in the last few years. The presence of a huge customer base on these social media platforms is creating lucrative opportunities for the companies as a customer spend most of their time on such platforms. Additionally, the social presence of companies is helping them to improve customer engagement for branding and advertising.
Market Restraining Factor:
Absence of knowledge about conversational AI solutions among enterprises
There is an increase in the adoption of conversational AI solutions across different verticals, which is expected to cater to different engagement types like customer services, content consumption, and other productive engagements. Though, consumers have restricted knowledge regarding virtual assistants, chatbots, and digital personal assistants, and their advantages. For example, Brazil and India have the largest base of smartphones users; although, the awareness about the advantages of technologies is comparatively less in these nations as compared to the developed ones.
Component Outlook
Based on Component, the market is segmented into Platform and Services. The majority of the companies within the conversational market are offering a conversational AI platform to develop applications, which is expected to resolve customer queries, give advice and recommendations by utilizing NLP, and other dialog-related technologies. The conversational AI platform includes various bot builder tools to develop numerous chatbots and assistants for companies. The key providers for conversational AI assist in deploying intelligent automation and technology for efficient customer engagement.
Technology Outlook
Based on Technology, the market is segmented into Natural Language Processing (NLP), Automated Speech Recognition, Deep Learning and Others. The evolution of AI technology is the result of its increasing demand from various verticals like healthcare and life sciences, BFSI, retail & eCommerce, manufacturing, telecom, and travel and hospitality. The growing requirement among companies to generate important insights from customer conversations on different platforms is estimated to surge the growth of the conversational AI market during the forecast period.
Deployment Type Outlook
Based on Deployment Type, the market is segmented into Cloud and On-premise. The cloud segment is projected to display the highest growth rate in the conversational AI market over the forecast period. Deployment is the process of establishing an IT infrastructure with operating systems, hardware, and applications, which are needed in order to operate the IT ecosystem. Companies can implement conversational AI on a particular deployment mode that can be based on availability, security, and scalability.
Type Outlook
Based on Type, the market is segmented into Chatbots and Intelligent Virtual Assistant (IVA). The Chatbots market dominated the Global Conversational AI Market by Type 2020, growing at a CAGR of 14.8 % during the forecast period. The Intelligent Virtual Assistant (IVA) market is estimated to grow at a CAGR of 18.7% during the forecast period.
End User Outlook
Based on End User, the market is segmented into Retail & eCommerce, BFSI, Travel & Hospitality, Healthcare, Telecom, Media & Entertainment, and Others. The retail & E-commerce segment accounted for the highest revenue share in the conversational AI market in 2020 and is estimated to acquire substantial growth over the forecast period.
Regional Outlook
Based on Regions, the market is segmented into North America, Europe, Asia Pacific, and Latin America, Middle East & Africa. Europe is also estimated to emerge as the second-largest region in the market with a significant market share over the forecast period. The rising demand to minimize enterprise workloads related to customer engagement & retention is increasing the adoption of conversational AI solutions in Europe.
The major strategies followed by the market participants are Product Launches. Based on the Analysis presented in the Cardinal matrix; Microsoft Corporation and Google, Inc. are the forerunners in the Conversational AI Market. Companies such as Amazon.com, Inc. Artificial Solutions, Conversica, Inc. are some of the key innovators in the market.
The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Microsoft Corporation, Baidu, Inc., IBM Corporation, SAP SE, Oracle Corporation, Google, Inc., Amazon.com, Inc., Artificial Solutions, Conversica, Inc. and Inbenta Technologies, Inc.
Recent Strategies Deployed in Conversational AI Market
Partnerships, Collaborations and Agreements:
- Sep-2021: Microsoft formed a partnership with Truveta, a healthcare data platform. This partnership aimed to apply the power of Microsoft Azure and AI to assist Truveta in getting its vision of saving lives with data.
- Jul-2021: Artificial Solutions, along with Microsoft signed a contract with A1 Bulgaria. Through LUIS^Teneo, a product of Artificial Solutions, A1 Bulgaria is expected to implement a range of conversational applications in its customer service and is expected to expand its reach to other languages through a smart localization feature, a unique functionality offered by Artificial Solutions.
- May-2021: Inbenta extended its partnership with GOL, a Brazilian airline. Under this partnership, GOL introduced new features to improve the capabilities of GAL, the airline’s virtual assistant, on WhatsApp.
- May-2021: Google Cloud joined hands with LivePerson, a global leader in conversational AI. This collaboration aimed to assist brands in making contact center agents more efficient and effective via the power of AI.
- Apr-2021: Google Cloud teamed up with Mr. Cooper Group, a provider of financial services. This collaboration aimed to develop a digital mortgage servicing platform, powered by data analytics, machine learning (ML), and artificial intelligence (AI), and cloud scalability to simplify the distribution, submission, signing, and review of loan documentation. Under this agreement, engineers & business leaders at both companies is expected to work to digitize Mr. Cooper’s main mortgage process, developing a more customized user experience by using conversational AI.
- Feb-2021: Google Cloud came into a partnership with UJET, the world’s first and only CCaaS 3.0 cloud contact center. Through this partnership, UJET’s solution is expected to be available on the Google Cloud Marketplace, which makes it easier for Google Cloud users to procure and implement UJET’s solution.
- Feb-2021: IBM Watson Health joined hands with Humana, a for-profit American health insurance company. This collaboration aimed to leverage IBM’s conversational artificial intelligence (AI) solution to offer a better member experience along with offering more clarity and transparency on advantages and other related matters for Humana Employer Group members.
- Jan-2021: Microsoft partnered with Yellow Messenger, a customer experience automation platform. This partnership aimed to upgrade Microsoft's voice AI services to behave more like a human. Together, Yellow Messenger with Microsoft’s Azure Cognitive division to develop a new platform, which customers can utilize to develop custom voice assistants for customer service and other purposes.
- Oct-2020: Inbenta came into a partnership with IntelePeer, a leading Communications Platform as a Service (CPaaS), and provider. This partnership aimed to empower the customer to develop smarter and more robust workflows so that companies can offer more agile, innovative, and scalable customer & employee support processes.
- Jun-2020: Microsoft entered into a partnership with SAS, an American multinational developer of analytics software. This partnership aimed to enable users to easily operate their SAS workloads in the cloud, expanding their solutions and unwrapping important value from their digital transformation initiatives. Under this partnership, the companies is expected to shift SAS’ analytical products and industry solutions to Microsoft Azure.
- Jan-2020: Artificial Solutions came into a partnership with Vonage, an American publicly held business cloud communications provider. This partnership aimed to launch a new connector that integrates Teneo into Vonage’s API Platform. Together, the companies is expected to offer their customers access to advanced conversational AI technology and easily incorporate it into their existing communications platforms.
Acquisitions and Mergers:
- Apr-2021: Microsoft will acquire Nuance Communications, an American multinational computer software technology corporation. This acquisition will focus on advancing cloud and artificial intelligence offerings for its healthcare customers.
Product Launches and Product Expansions:
- Sep-2021: IBM introduced the latest AI and automation features in IBM Watson Assistant. These new features is expected to enable companies to evolve more rapidly, establish a voice agent with IntelePeer and allow more seamless hand-offs to live agents.
- Aug-2021: Baidu introduced Baidu Brain 7.0, a new version of its platform. The upgraded Baidu Brain 7.0 provides better integration of a broad variety of knowledge sources and deep learning, consisting of language comprehension and reasoning, utilizing various combined technologies to allow output across language, voice, and visual formats.
- Jul-2021: Google launched Meena, the best chatty of all prevailing state-of-the-art conversational AI agents. Meena is trained as an end-to-end, neural conversational model, which response sensibly to a given conversational context.
- May-2021: Google launched Vertex AI, a managed machine learning (ML) platform. This platform enables companies to boost the deployment and maintenance of AI models.
- May-2021: IBM released a new product Watson Orchestrate. This product helps companies to automate tasks, capitalize on the rise of chatbots and virtual assistants in the pandemic and move ahead in its pivot toward cloud services and artificial intelligence.
- Mar-2021: Inbenta launched its newest solution, Conversational AI Search. Through this solution, the company is expected to enable website shoppers to get improved outcomes as they can see the right product at the right time that is expected to raise the conversions.
- Mar-2021: Oracle introduced a new update for its voice assistant. The Oracle Digital Assistant is expected to incorporate native multilingual natural language understanding and personalized vocabulary.
- Mar-2021: IBM rolled out Watson Assistant, a smart enterprise assistant powered with artificial intelligence (AI), cloud, and the Internet of Things (IoT). This assistant can be accessible through voice or text interaction. The smart enterprise assistant helps companies to improve their brand loyalty and transform customer experiences while keeping the data private & safe.
- Jan-2021: AWS introduced AWS Contact Center Intelligence (CCI) solutions powered by AWS AI Services. These solutions enable companies to leverage AWS machine learning (ML) capabilities with their prevailing contact center provider to achieve more efficiencies and provide highly customized customer experiences with no ML expertise needed.
- Nov-2020: AWS announced that Amazon Lex and Amazon Polly is expected to have expanded language support. Companies can develop ML-powered applications, which fit the language preferences of any company's users. These services enable companies to add intelligence to their business processes, reduce costs, automate workstreams, and enhance the customer experience for their customers and employees in a wide range of languages.
- Oct-2020: Conversica introduced AI-powered human-like, two-way conversations over chat for free through its Intelligent Virtual Assistants (IVAs) to its traditional website chat offerings. Conversica IVAs help in engaging with website visitors and rapidly connect them to the data they seek through chat, utilize email and SMS to nurture them via a qualification procedure, and pass hot qualified opportunities to customer-facing teams.
- Sep-2020: Baidu unveiled an advanced virtual assistant app, Duxiaoxiao. This app provides users with a range of information and services, through which, they can directly converse with the app to assist in resolving everyday questions.
Scope of the Study
Market Segments Covered in the Report:
By Component
- Platform
- Services
By Technology
- Natural Language Processing (NLP)
- Automated Speech Recognition
- Deep Learning
- Others
By Deployment Type
- Cloud
- On-premise
By Type
- Chatbots
- Intelligent Virtual Assistant (IVA)
By End User
- Retail & eCommerce
- BFSI
- Travel & Hospitality
- Healthcare
- Telecom
- Media & Entertainment
- Others
By Geography
- North America
- US
- Canada
- Mexico
- Rest of North America
- Europe
- Germany
- UK
- France
- Russia
- Spain
- Italy
- Rest of Europe
- Asia Pacific
- China
- Japan
- India
- South Korea
- Singapore
- Malaysia
- Rest of Asia Pacific
- LAMEA
- Brazil
- Argentina
- UAE
- Saudi Arabia
- South Africa
- Nigeria
- Rest of LAMEA
Key Market Players
List of Companies Profiled in the Report:
- Microsoft Corporation
- Baidu, Inc.
- IBM Corporation
- SAP SE
- Oracle Corporation
- Google, Inc.
- Amazon.com, Inc.
- Artificial Solutions
- Conversica, Inc.
- Inbenta Technologies, Inc.
Unique Offerings from the Publisher
- Exhaustive coverage
- The highest number of market tables and figures
- Subscription-based model available
- Guaranteed best price
- Assured post sales research support with 10% customization free
Table of Contents
Companies Mentioned
- Microsoft Corporation
- Baidu, Inc.
- IBM Corporation
- SAP SE
- Oracle Corporation
- Google, Inc.
- Amazon.com, Inc.
- Artificial Solutions
- Conversica, Inc.
- Inbenta Technologies, Inc.
Methodology
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