The global chatbot market is expected to grow by US$1.11 billion accelerating at a CAGR of almost 29% between 2020-2024.
Technavio noted that during 2019, the retail segment dominated the Global Chatbot Market in 2019. Amazon, Flipkart, Alibaba, and Snapdeal are a few of the major e-commerce platforms. These retailers are implementing chatbots to provide an enhanced experience to their customers in online product searches. With the increasing use of smartphones and mobile banking apps, shoppers increasingly prefer to shop using their smartphones. Brands are looking to offer an efficient shopping experience to online customers. Which will result in the growth of the global chatbot market during the forecast period.
Why deploy chatbots?
The advantages of chatbots over other customer support options is one of the primary factors driving chatbot market growth. Chatbots offer benefits like on-time responses, 24/7 customer support, and reduction in customer support costs. They can recognize human emotions like anger, confusion, fear, and joy.
Therefore, from providing lifestyle advice to customer support, chatbots are opening innovative ways of business-customer interaction. This provides chatbots an edge over other customer support options that are available in the market, driving market growth.
The market is fragmented. The growth of the players depends on several factors such as market conditions, government support, and industry development. To survive and succeed in such an intensely competitive market, players must distinguish their product and service offerings through clear and unique value propositions.
To make the most of the opportunities, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their position in the slow-growing segments.
IDC’s Arnal Dayaratna, research director, Software Development, offers a more reflective assessment of the marketplace noting that while developers enjoy an embarrassment of riches with respect to developer tools used for chatbot development, they tend to gravitate a core cluster of chatbot development frameworks such as Amazon Lex, IBM Watson, Google's Dialogflow, and the Microsoft Bot Framework.
He also adds that: "With respect to languages, developers evinced strong affinities for Python and Java. Separate from considerations about development languages and frameworks, organizations that pursued chatbot development concurred on the importance of customizing chatbots to reflect the specificity of their audiences and setting realistic expectations about the return on investment."