Chatbots Market Projected to Reach $9.17 Billion by 2025

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The global chatbots market was valued at $2.29 billion in 2018 and is projected to reach $9.17 billion by 2025, growing at a compound annual rate of 21.95 percent, according to a new report by Valuates.

The research firm notes in the report that the primary growth drivers for chatbots include the fast pace of technological innovation coupled with increasing consumer demand for self-service and a desire among companies for 24/7 customer care with lower operating costs.

On the technology side, Valuates notes that artificial intelligence (AI), the Internet of Things, and application programming interfaces are emerging at a rapid pace. Using these technologies, chatbots can be designed to deliver improved operations and fuel consumer demand, it said. It expects voice-based audio chatbots to constitute the biggest market share in the future.

As consumer loyalty and retention rise in importance across industries, chatbots can be an efficient way to increase consumer engagement and, thereby, loyalty, Valuates concluded.

Chatbots are proving to be a powerful agent capable of delivering 24/7 service while reducing overall operational costs, it said in the report. In addition, AI-powered talkbots have advantages, such as automating routine tasks leading to improved process performance, providing multilanguage support, and offering better self-service experiences.

Another reason for deploying AI-powered chatbots is attracting, maintaining, and engaging new customers due to their ability to gather new data and shorten sales life cycles, Valuates said.

Machine learning is now being used to assess trades performed on Wall Street and to predict how consumers are going to click on different advertisements, it found. Besides being revenue generators, chatbots also save companies money for lead generation and brand recognition.

Insurance firms, the research found,  represent some of the early adopters of AI chatbots, using location-based technology to automatically start the claims process, along with visual resources such as live chat, to inform consumers about changes to requests, inspections, and documentation claims, and to update them on claim status.

In a separate report, Valuates found the global healthcare market to show tremendous potential as well. It predicts the market will rise at a CAGR of 21.01 percent from $110.68 million in 2018 to $420.68 million by the end of 2025. The factors attributable to this growth are the need for AI-integrated virtual health assistance, compatibility with mobile phones, consistent technological advancements, and rapid adoption of smart devices.

Nonetheless, while the adoption of chatbots is growing in some industries, challenges related to efficient use and limited knowledge of the benefits offered by AI chatbots will continue to limit growth in some sectors, Valuates concluded.

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