‘Chat first’ adoption feeding conversational AI growth

Photo by Andy Kelly

The global conversational AI market size is projected to reach US$32.62 billion by 2030 from $5.78 billion in 2020, with a CAGR of 20% over the 10-year period, according to Valuates Reports.

The market is predicted to rise due to an increase in demand for AI-based chatbot solutions and artificial intelligence-powered customer support services.

During the forecast period, the conversational AI market is anticipated to benefit from an increase in the deployment of omnichannel approaches as well as an increase in client involvement through social media platforms.

Conversational AI market growth is likely to be boosted by technological advancements such as natural language processing (NLP) and the expanding ‘Chat first’ strategy adopted by the service industry.

Staffing a customer service department can be costly, especially if problems must be addressed outside of typical business hours. Small and medium-sized enterprises can save money on salaries and training by providing customer assistance using conversational interfaces. 

Chatbots and virtual assistants can respond instantly, allowing potential consumers to contact you at any time of day or night. Thus, the cost-efficient feature is expected to drive the growth of the conversation AI market.

The attention of companies has turned away from offering customer care via emails or messages and toward AI-powered chatbots that help them improve customer experience and engagement. NLP technology is used by AI-powered chatbots to conduct human-like interactions and provide real-time assistance to clients. 

AI-enabled chatbots and virtual agents can also be used to automate repetitive and manual activities including order placement, balance inquiries, general queries, technical assistance, and other customer services.  

COVID-19’s outbreak accelerated the expansion of the conversational AI market and it is predicted to continue at a rapid pace by the end of 2021. During the projection period, the conversational AI market will rise due to an increase in the usage of chatbot solutions in the healthcare, retail and e-commerce, and telecommunications sectors.

Based on deployment, in 2020, the cloud category generated the most revenue, and it is expected to gain substantial market share over the projected period.

In terms of type, the chatbots sector will have the greatest market share, and it is predicted to increase at a fast rate from 2021 to 2030.

Based on technology, the NLP category dominated the market in 2020, and this trend is likely to continue during the forecast period.

In terms of end-user, the retail and e-commerce segment dominated in 2020, and it is expected to expand significantly during the projected period.