Apple, Google, Facebook, and Microsoft are worldwide technology powerhouses, but when it comes to the adoption of virtual digital assistants (VDAs) like Siri, Google Assistant, and Cortana, scale only takes you so far. In this particular business, players who successfully cater to the nuances of individual countries will conquer the global VDA market. The same principle will apply to enterprises looking to automate customer interactions like customer service and e-commerce with enterprise VDAs.
The challenges facing VDA providers were brought to light recently by the plight of Jibo, the crowdfunded smart home VDA robot that received pre-orders from consumers in 47 countries. On August 9, the company announced that product rollouts would be limited to the United States and Canada only, and that all orders for Jibo outside those markets will be refunded. Basically, three issues are driving that decision. First, Jibo discovered international latency issues due to all of the company’s servers being based in the United States. Second, during testing, the company found that the VDA had trouble understanding “accented English.” Third, “rapidly changing consumer-privacy laws” in some countries make it difficult to deliver personal data services from servers outside of those countries.
The lessons learned for VDA players were that you most likely will need a “fully localized” version for each market you want and you need to address varying requirements for latency, consumer privacy, and language. This all adds a second layer of criteria and costs to market prioritization and business cases after determining the addressable markets.
Following this rationale leads to the largest developed, highest per-capita income markets seeing the most consumer and enterprise VDA competition and market adoption. The obvious primary markets are the United States, China, and Japan. Do these extra barriers mean larger developing markets like Brazil, India, and Indonesia will become more likely VDA targets than the markets of Belgium, the United Kingdom, or Australia? It will be intriguing to see how data privacy, latency, and redundancy issues impact VDA market adoption.
Tractica examines the market drivers and barriers further in our most recent market research report, Virtual Digital Assistants. In that report, we that unique active consumer VDA users will grow from 390 million in 2015 to 1.8 billion worldwide by the end of 2021. During the same period, unique active enterprise VDA users will rise from 155 million in 2015 to 843 million by 2021.