A2P Messaging Market

A2P Messaging Market Size:

The global A2P messaging market size reached US$ 69.6 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 96.5 Billion by 2032, exhibiting a growth rate (CAGR) of 3.69% during 2024-2032. The rising applications of A2P messaging across numerous industry verticals, growing proliferation of internet services and smartphone users, rapid expansion in the e-commerce and BFSI sectors, and increasing adoption of mobile advertising are some of the major factors propelling the A2P messaging market.

Application-to-person (A2P) messaging refers to a type of service that involves sending automated SMS or MMS messages via third-party applications run by an enterprise to customers over their smartphones or mobile devices. It allows an efficient means of communication for businesses to connect with their customers easily. Some commonly used A2P messaging solutions include alerts, notifications, marketing campaigns, promotional codes, one-time passwords (OTP), and other bulk messages. It enables organizations to interact and engage with their consumer base more often in a faster, more reliable, and cost-effective manner. As a result, A2P messaging has gained immense traction as a popular sales and marketing communications tool for brands. 

The rising adoption of A2P messaging by businesses for advertising and marketing purposes to promote events, brands, product launches, and other activities will propel the growth of the A2P messaging market during the forecast period. A rise in the penetration of smartphones and the growing focus on customer acquisition and engagement has strengthened the need for A2P messaging services. Since A2P messaging facilitates real-time, personalized, targeted, and automated communication between enterprises and customers, the surging demand for businesses to offer improved customer service and interactions to stay competitive represents the key factor fueling the market expansion. Moreover, the emerging trend of mobile advertising, the availability of high-speed internet across the globe, and increasing product applications across different industry verticals are other factors contributing to the market growth. 

A2P Messaging Market Trends/Drivers:

Increase in applications of A2P messaging across numerous sectors

A2P messaging is extensively deployed across different sectors, including banking, financial services, and insurance (BFSI), retail and e-commerce, government, hyperlocal businesses, healthcare, travel and tourism, and hospitality. The increasing use of A2P messaging for a range of applications, such as authentication, customer relationship management, promotion and marketing, interactive messages, and pushed content services, is augmenting the market growth. Besides this, the emerging trend of launching large-scale mobile marketing campaigns by corporate entities across the globe is also anticipated to favor the expansion of the A2P messaging market during the forecast period. Moreover, the surging number of mobile subscriptions is providing businesses with new and creative ways to communicate with a broader customer base, which in turn is driving the demand for A2P messaging. 

Rise in online shopping activities of individuals

The A2P messaging business now has a profitable growth opportunity due to the widespread utilization of e-commerce platforms, resulting in a significant rise in online shopping activities across the globe. Various e-commerce companies are adopting A2P messaging solutions to provide consumers with important order updates, account login information, transaction alerts, and shipping notifications. By delivering personalized messages to customers based on their purchase history or browsing behavior, e-commerce businesses can boost their customer engagement and conversions. As a result, the growing utilization of A2P messaging services to send targeted promotions, discount coupons, and other incentives to encourage individuals to make a purchase is expected to propel the growth of the A2P messaging market during the forecast period. 

Surge in mobile phone data and services subscribers

In recent years, the advent of the mobile-first culture and the escalating adoption of mobile marketing campaigns are considered the results of the rising number of mobile subscribers across the world. Since A2P messaging has high open and click-through rates and very low cost per SMS sent, making it more efficient than email, it is rapidly gaining widespread preference among enterprises. SMS open rates are high as 98 percent, response rates exceed 40 percent, while 95 percent of all SMS are open and read within three minutes. Moreover, several studies have revealed that, on average, individuals reply to an SMS in less than 90 seconds, whereas they might take 90 minutes to respond to an email. A2P offers a secure, reliable, faster way to engage with customers in real-time. Therefore, A2P messaging is anticipated to witness significant growth during the forecast period. 

A2P Messaging Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global A2P messaging market report, along with forecasts at the global, regional, and country levels from 2024-2032. Our report has categorized the market based on component, deployment mode, SMS traffic, application, and end user.

Breakup by Component:

• Platform
• A2P Service
   

Platform is dominating the A2P messaging market

The report has provided a detailed breakup and analysis of the A2P messaging market based on the component. This includes platform and A2P service. According to the report, platform represented the largest segment.

A2P messaging platforms are widely preferred and used by organizations to ensure the delivery of personalized, targeted, and automated messages via appropriate routes to customers. These powerful and highly efficient platforms can send immediate or scheduled messages in bulk quantities every second, fulfilling the unique message requirements of businesses worldwide. Since they are relatively more cost-efficient, provide easy access and customization tools within the app, and support different types of messages, the A2P messaging platform segment is predicted to experience significant expansion during the forecast period. Moreover, these platforms comprise various products and offer updates and promotions, especially for small and medium enterprises, which is fueling their adoption globally. Also, the surging need for real-time and effective communication between customers and businesses is accelerating the growth of this segment.

Breakup by Deployment Mode:

• On-premises
• Cloud-based
   

Cloud-based deployment mode hold the largest share in A2P messaging industry

A detailed breakup and analysis of the A2P messaging market based on the deployment mode has also been provided in the report. This includes on-premises and cloud-based. According to the report, cloud-based accounted for the largest market share.

Cloud-based A2P messaging offers an integrated and effective messaging solution that enables efficient customer interaction. These platforms easily incorporate SMS, MMS, phone, and other services to provide a secure mobile messaging experience, which propels the growth of the cloud-based segment. Additionally, the market is predicted to expand because of the easy deployment and scalability offered by cloud-based A2P messaging platforms. Compared to cloud-based platforms, on-premises models require administration, deployment, maintenance, and scale hardware and software. Since these solutions are more expensive and complex to manage and deploy, the adoption of cloud-based platforms, especially among small and medium-sized enterprises (SMEs), is expected to increase during the forecasted period. Other factors that are driving the expansion of this segment include the rising number of cloud service providers around the world and the increasing penetration of cloud technologies.

Breakup by SMS Traffic:

• National Traffic
• Multi-Country
   

National traffic accounts for the majority of the market share

The report has provided a detailed breakup and analysis of the A2P messaging market based on the SMS traffic. This includes national traffic and multi-country. According to the report, national traffic represented the largest segment.

National SMS traffic refers to messages sent to local or domestic customers within a country. A substantial rise in online transactions, alerts, and notifications has led to an upsurge in message traffic owing to the rapid expansion in the e-commerce industry. This is further supported by the recent outbreak of the coronavirus disease (COVID-19) across the globe, resulting in the increased online activity of users following the temporary closure of retail stores, outlets, and shops due to lockdowns and social distancing regulations. Also, the rising number of hyperlocal businesses across numerous countries has led to a shift in focus toward domestic customers, contributing to a rise in national SMS traffic to facilitate real-time, targeted communication between businesses and local customers. Therefore, the national SMS traffic segment is anticipated to witness growth during the forecast period.

Breakup by Application:

• Authentication Services
• Promotional and Marketing Services
• Pushed Content Services
• Interactive Messages Services
• Customer Relationship Management Services
• Others
   

Customer relationship management services represent the largest application segment

A detailed breakup and analysis of the A2P messaging market based on the end use has also been provided in the report. This includes authentication services, promotional and marketing services, pushed content services, interactive messages services, customer relationship management services, and others. According to the report, customer relationship management services accounted for the largest market share.

Customer relationship management (CRM) services aid in analyzing consumer behavior and trends. The platform assigns and manages customer relationships by sending personalized and targeted A2P SMS services based on previous customer interactions and browsing data to encourage individuals to purchase products or services, resulting in higher revenue and engagement. The main factor that is driving the growth of this segment is the augmenting need for businesses to stand out from competitors and establish personal connections with clients. Along with this, the rising focus on improving customer service and relationships among both small- and large-scale enterprises will further boost the expansion of the customer relationship management services segment. Additionally, an increase in the number of startups and businesses adopting A2P messaging for CRM, majorly in developed and developing countries, is stimulating the growth of this segment. 

Breakup by End User:

• BFSI
• Retail and Ecommerce
• E-Governance
• Hyperlocal Businesses
• Healthcare
• Travel and Hospitality
• Others
   

BFSI is dominating the A2P messaging industry

The report has provided a detailed breakup and analysis of the A2P messaging market based on the end user. This includes BFSI, retail and ecommerce, e-governance, hyperlocal businesses, healthcare, travel and hospitality, and others. According to the report, BFSI represented the largest segment.

The BFSI sector comprises various banks, financial institutions, and insurance companies that use A2P messaging to send payment reminders, balance statements, notifications, one-time passwords (OTP), and anti-fraud alerts to their customers. A2P messaging platforms aid BFSI enterprises in facilitating real-time communications with clients and establishing a strong relationship with consumers by providing transaction details, customer actions, and needs-related retail banking operations, thereby maintaining high levels of transparency. Due to the surging penetration of smartphones and high-speed internet and the rapidly expanding tech-savvy user base across the globe, there is a rise in demand for prompt customer services. This, in turn, is accelerating the adoption of A2P messaging among banking and financial institutions, thus catalyzing the expansion of this segment. As a result, the BFSI segment is projected to witness substantial growth during the forecast period.

Breakup by Region:

• North America
  • United States
  • Canada
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Others
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

Asia Pacific exhibits a clear dominance, accounting for the largest A2P messaging market share

The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Europe (Germany, France, the United Kingdom, Italy, Spain, and others); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, Asia Pacific was the largest market for A2P messaging.

Asia Pacific held the biggest market share due to the growing proliferation of smartphones and internet services in the region. Moreover, the presence of an extensive and distributed customer base, especially in countries such as China and India, is providing a profitable growth opportunity for the A2P messaging market. The untapped potential of the Asia Pacific region is generating new investment opportunities for regional telecom operators and advertisers. In addition, several multinational companies are focusing on business expansion across Asia Pacific due to the diversified customer base and internet subscribers. Another contributing aspect is the use of A2P messaging in numerous applications, including customer relationship management and promotional and marketing campaigns, to boost brand recognition and sales. Owing to the cost-effectiveness and broad reach of A2P messaging, the emergence of e-commerce channels and mobile banking, and the regional expansion of enterprises, Asia Pacific is predicted to experience substantial growth during the forecast period.

Competitive Landscape:

The global A2P messaging market is experiencing steady growth on account of new product or service launches and ongoing strategic collaborations and partnerships among key players. The market is witnessing a rise in healthy business competition due to the presence of a large number of players in the industry. Various multinational companies are collaborating with telecom operators, advertisers, and local and regional players to gain a competitive edge over their peers and capture a significant market share. Moreover, the market is expected to witness new entrants, rising consolidation and expansion of portfolios, and increasing mergers and acquisitions (M&As) to drive the growth of the A2P messaging domain.

The report has provided a comprehensive analysis of the competitive landscape in the global A2P messaging market. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

• BICS SA/NV (Proximus Group)
• China Mobile Limited
• Comviva (Tech Mahindra)
• Infobip Ltd.
• Monty Mobile
• Orange S.A.
• Route Mobile Limited
• Sinch AB
• Tata Communications Limited
• Twilio Inc.

Recent Developments:

• In March 2023, Infobip Ltd. announced the integration of WhatsApp and SMS messaging notifications into Adobe Commerce, allowing enterprises and organizations to increase loyalty and enhance customer experience by adding more communication channels.
• In November 2020, Twilio Inc. acquired Segment, the market-leading customer data platform. This acquisition will help the company offer highly personalized customer touchpoints, allowing businesses to create their customer engagement across every communication channel more personalized, timely, and impactful.
• In June 2020, Sinch AB completed the first stage in the acquisition of ACL Mobile Ltd., expanding its presence for A2P messaging and communications services in India and Southeast Asia.

A2P Messaging Market Report Scope:

Key Questions Answered in This Report:

• How has the global A2P messaging market performed so far, and how will it perform in the coming years?
• What are the drivers, restraints, and opportunities in the global A2P messaging market?
• What is the impact of each driver, restraint, and opportunity on the global A2P messaging market?
• What are the key regional markets?
• Which countries represent the most attractive A2P messaging market?
• What is the breakup of the market based on the component?
• Which is the most attractive component in the A2P messaging market?
• What is the breakup of the market based on the deployment mode?
• Which is the most attractive deployment mode in the A2P messaging market?
• What is the breakup of the market based on the SMS traffic?
• Which is the most attractive SMS traffic in the A2P messaging market?
• What is the breakup of the market based on the application?
• Which is the most attractive application in the A2P messaging market?
• What is the breakup of the market based on the end user?
• Which is the most attractive end user in the A2P messaging market?
• What is the competitive structure of the global A2P messaging market?
• Who are the key players/companies in the global A2P messaging market?

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the A2P messaging market from 2018-2032.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global A2P messaging market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the A2P messaging industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.