The global digital human avatar services market is projected to reach USD 109.81 billion by 2032, growing at a steady revenue CAGR of 37.9% during the forecast period, according to the latest analysis by Emergen Research.
Advancements in technologies, such as conversational Artificial Intelligence (AI), are key factors driving market revenue growth. The increasing popularity of conversational AI solutions, including chatbots, virtual agents, and voice assistants, extends beyond large Information Technology (IT) companies. Enterprises, mid-sized organisations, and startups are employing automatic voice recognition technologies, chatbots, or digital assistants to enhance customer and workforce experiences across various industries.
In addition to sales and query responses, digital humans can streamline other customer support duties. For instance, Kia Motors and NTT DATA Business Solutions developed ‘Kia Mia’, a digital human using conversational AI, deployed in vehicle showrooms to engage clients and answer complex inquiries. Conversational digital humans simplify daily tasks. Retail customers, for example, can use voice commands to find products, place orders, make payments, track shipments, and provide reviews. This technology can also leverage purchasing history for reorders.
Drivers of the Digital Human Avatar Services Market
Several factors are driving the growth of the digital human avatar services market. The increasing adoption of AI and machine learning (ML) technologies has significantly enhanced the capabilities of digital avatars, making them more lifelike and interactive. This has expanded their application in industries such as retail, where they serve as virtual sales assistants, and customer service, where they offer 24/7 support.
Additionally, the rise of the metaverse—a virtual environment where users can interact with each other and digital entities—has created a burgeoning demand for digital human avatars. The entertainment industry, particularly gaming and virtual reality (VR), is another major driver, as these sectors increasingly incorporate avatars to create more immersive experiences. The growing focus on personalised customer engagement and the need for cost-effective solutions in various business processes also contribute to the market’s expansion.
Restraints of the Digital Human Avatar Services Market
Despite its promising growth, the digital human avatar services market faces several challenges. One primary restraint is the high cost associated with the development and deployment of digital avatars. Creating a highly realistic and functional digital human avatar requires sophisticated technology, which can be expensive for many businesses, particularly small and medium-sized enterprises (SMEs).
Moreover, concerns over privacy and data security hamper the market’s growth, as these avatars often require access to vast amounts of personal data to function effectively. This raises significant ethical and regulatory issues, particularly in regions with strict data protection laws. Additionally, the complexity of integrating digital human avatars into existing systems and potential technical glitches pose challenges to widespread adoption.
Growth Factors
Several growth factors are expected to propel the digital human avatar services market in the coming years. Rapid advancements in AI and 3D animation technologies will continue to enhance the capabilities of digital avatars, making them more accessible and affordable for businesses across various sectors. The growing popularity of the metaverse and VR environments is also expected to drive demand, as these digital spaces rely heavily on interactive avatars.
Furthermore, the increasing emphasis on customer experience and personalisation in marketing and customer service will boost the adoption of digital human avatars as businesses seek innovative ways to engage with their customers. The ongoing digital transformation across industries, coupled with the need for efficient, scalable, and cost-effective customer interaction solutions, will further contribute to the market’s growth.
Key Highlights from the Report
In April 2022, Hour One raised USD 20 million to introduce more ‘virtual humans’ into the workplace. Users of any mobile or desktop device can quickly create videos from text using the Reals self-service platform. Users input text, which is read aloud by an avatar synchronised with appropriate voice and images.
The sales services segment is expected to account for the largest revenue share in the global digital human avatar services market over the forecast period. This is due to the increasing use of digital human avatars as virtual representatives in sales service contexts to engage with consumers. This technology may be utilised for various purposes, including online customer support, virtual consultations, and virtual showrooms.
The Banking, Financial Services, and Insurance (BFSI) segment is expected to register a steadily fast revenue growth rate in the global human avatar services market over the forecast period. This is attributed to the fact that digital humans are the future of banking customer experience. These can help to accelerate digital adoption by using a multi-sensory approach comparable to one-on-one interactions with a human agent. Digital humans minimise the need for excessive text and complex instructions that drive customers away from self-service channels by using audiovisual components, while steering consumers toward goal completion.
The B2B Marketer, the online destination for B2B marketing professionals seeking valuable insights, trends, and resources to drive their marketing strategies and achieve business success.
