According to the new research report on "Conversational AI Market Size and Forecast (2021-2031), Global and Regional Share, Trends, and Growth Opportunity Analysis," published by The Insight Partners, the market is expected to reach US$ US$ 39.55 billion by 2031 and register a CAGR of 21.3% from 2023 to 2031.
The report includes growth prospects owing to the current conversational AI market trends and their foreseeable impact during the forecast period. The market in North America is experiencing robust growth owing to the widespread adoption of innovative technologies and the rapidly increasing need for AI-powered customer support services. In addition, the majority of businesses in North America are investing in technological innovations to meet and exceed the needs of their clientele. The region is witnessing tremendous growth in its retail and e-commerce sectors. As per the US Department of Commerce, retail e-commerce sales for Q1 2024 were US$ 289.2 billion in the US, which was an increase of 2.1% compared to Q4 2023. Also, according to the International Trade Administration (ITA), in 2022, there were ~27 million e-commerce users in Canada, accounting for 75% of the Canadian population, and the number is expected to reach 77.6% by 2025. In March 2022, e-commerce sales were ~US$ 2.34 billion and are estimated to reach US$ 40.3 billion by 2025. Thus, the growth of the e-commerce sector in the region is boosting the conversational AI market growth in North America.
North America is witnessing a rise in digitization in the healthcare sector. According to the Canada Health Infoway, Canadians are embracing digital health services, and it is also estimated that the demand for digital healthcare services will increase in the coming years. According to an online survey conducted in November 2022 with 12,445 Canadians, 94% of Canadians were interested in accessing digital health services. Thus, growing digitization in the healthcare sector raises the demand for conversational AI by healthcare providers as it can help them effectively manage patient care and analyze large amounts of medical data, thus fueling the growth of the conversational AI market in the region.
Furthermore, France hold the significant conversational AI market share in Europe. The Government of France is taking various initiatives to increase digitization in several sectors of the country, particularly in the healthcare sector. In June 2023, the Digital Health Priority Research Program and Infrastructure, which is jointly backed by Inserm and Inria, launched a seven-year budget of US$ 64.34 million (60 million), with an aim to position the country as the European leader in digital health innovation. In October 2021, the Government of France announced an investment plan of US$ 751 million (650 million), divided into five axes, to accelerate the national digital health strategy as part of its Health Innovation 2030 plan. The growing investment in the digitization of the healthcare sector propels the conversational AI market growth in France.
Also, the UK has witnessed tremendous growth in online shopping. According to ITA, the e-commerce market accounted for 30% of the total retail market in 2021, with annual revenue totaling over US$ 120 billion, which rose from 20% in 2020. In 2021, around 82% of the UK population purchased at least one product online. Hence, the growing adoption of online shopping fuels the growth of the conversational AI market in the UK. Furthermore, the National Health Service (NHS) is undergoing a financing reform to support the transformation of health and social care through technological applications such as digital skills, high-speed connectivity, and cyber resilience. To support this, the UK Government is making various investments in the digitization of the healthcare sector. For instance, in June 2022, the government announced an investment of US$ 182.38 million (£150 million) over the next three years to support social care and enable digital healthcare transformation. Similarly, in October 2023, the Department of Health and Social Care announced an investment of US$ 36.40 million (£30 million) in innovative technology for the NHS. Thus, such growing investments in the digitization of the healthcare sector fuel the growth of the UK conversational AI market.
Conversational AI Market Report: Key Findings
The conversational AI market analysis is based on segmental assessment. Based on component, the conversational AI market is bifurcated into platforms and services. The platforms segment held the largest conversational AI market share in 2023 and is anticipated to record the highest CAGR during 2023-2031. A conversational AI platform is software that allows users to create, train, and deploy chatbots or "virtual agents." The systems typically use machine learning (ML), natural language comprehension, and natural language processing techniques to understand the intent behind questions posed by consumers or prospects and respond accordingly. Many conversational AI platforms have pre-built components that allow users to create chatbots or conversational agents without understanding the codes. These components may contain templates and pre-built workflows, which support industries to automate tasks, empower their agents, and improve customer experience. Conversational AI platforms enable organizations to automate customer service such as answering frequently asked inquiries (FAQs) and reducing customer service costs. Moreover, increasing demand for cost-effective solutions among industries drives the conversational AI market growth for the platform segment.
The conversational AI market offers a broad range of services, including integration and deployment, consulting and advisory, support and maintenance, and training and education. The integration and deployment services support users to ensure the smooth incorporation of conversational AI platforms into existing frameworks. The consulting and advisory services provide strategic guidance and advisory support, which help businesses deploy appropriate conversational AI platforms that improve operational efficiency by reducing costs. Training and education services allow business to upgrade their technical team with the latest innovations and technologies. Support and maintenance services assist in ongoing processes, issue resolution, increasing performance, and improving the user experience. These services ensure that Al-powered chatbots and virtual assistants run smoothly and efficiently. The adoption of conversational AI services helps businesses implement AI advancements in their communication services and focus on enhancing conversational experiences.
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