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Conversational Commerce Advances with AI Innovations

The global eCommerce market gained new momentum as the COVID-19 pandemic transformed many legacy business sectors. As an example, conversational commerce enables end-users of smart devices to leverage them for commercial purposes -- including retail transactions and online banking.

The ecosystem for conversational commerce has evolved with many communication service providers acting as the primary point of connection between the end-users of these devices and the brands, enterprises, and financial institutions that use them.

According to the latest worldwide market study by Juniper Research, the global conversational commerce spend over rich communication services (RCS) messaging will reach $27 billion by 2025 -- that's rising from less than $10 million in 2021.

Conversational Commerce Market Development

This phenomenal growth will be driven by increasing RCS support from telecom network operators and growing interest from business leaders wishing to capitalize on this emerging eCommerce channel.

RCS is a communications protocol that enables rich media messaging services -- including AI-enabled chatbots and in-app payments -- over mobile cellular communication networks.

The Juniper study forecasts that RCS will be the fastest-growing conversational commerce channel over the next 5 years. By 2025, the technology is anticipated to account for 10 percent of conversational commerce spend -- rising from less than 1 percent in 2021.

Juniper analysts have identified three markets that will present immediate opportunities via RCS-based conversational commerce to communications platforms: Retail, ​Media, and ​Fast Moving Consumer Goods (FMCG).

Juniper now predicts that low levels of regulatory restrictions and high levels of user readiness will drive enterprises in these markets to explore RCS as a commerce channel first.


As a result, Juniper analysts believe that communications platforms must target industry players in these emerging markets as a matter of priority.

"Enterprises are focused on offering services through as many channels as possible. RCS is well-positioned to handle the migration of commerce activities from established channels, such as online or in an app," said Sam Barker, lead analyst at Juniper Research.

In addition to onboarding new service users, Juniper has identified the need for communications platforms to partner with multiple payments providers -- owing to the regional differences in digital payment preferences.

According to the Juniper assessment, communications platforms should focus on forming partnerships in countries where there is already a high base of RCS-capable subscribers -- such as the U.S. market, Brazil, and Germany.

Outlook for Conversational Commerce Applications Growth

The Juniper study findings indicate that only 18 percent of mobile subscribers will access RCS services in 2021, however, this is anticipated to grow to over 40 percent by 2025 -- identifying the Americas as a key growth region over the next 5 years.

That said, I believe that the ability to offer conversational commerce as part of an omnichannel retail strategy will likely increase confidence in the capabilities of these new online channels. This allows retailers to expand their reach while also providing a fall-back to more traditional commerce channels.

The digital payment ecosystem, driven by fintech services and mobile apps, has become aligned with smartphones and is enticing more people into the online payments arena. Also, mobile wallets are likely to see increased use, due to their growing acceptance as a payment option on more retailer websites.

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