Recommendation Engine Market Analysis of Industry Size and Economic Growth By 2028

Recommendation Engine Industry Overview

The global recommendation engine market size is expected to reach USD 17.30 billion by 2028, according to a new report by Grand View Research, Inc. The market is expected to expand at a CAGR of 33.0% from 2021 to 2028. The growing adoption of digital technologies among organizations is one of the key factors driving the market. In addition, the rising competition among organizations and the need to provide a better customer experience are increasing the demand for recommendation systems.

U.S. recommendation engine market size, by type, 2018 - 2028 (USD Million)

Recommendation Engine Market Segmentation

Grand View Research has segmented the global recommendation engine market based on type, deployment, application, organization, end-use, and region:

Based on the Type Insights, the market is segmented into Collaborative Filtering, Content-based Filtering and Hybrid Recommendation.

  • The collaborative filtering segment accounted for the largest revenue share of over 40.0% in 2020 and is projected to retain its lead over the forecast period. This can be attributed to the rising demand for reliable recommendation engines from e-commerce platforms to enhance their customers’ shopping experience by suggesting products based on their tastes and preferences.
  • The hybrid recommendation segment is projected to expand at the highest CAGR of 34.4% over the forecast period. The growth of this segment can be attributed to the increase in demand from organizations that need features of both collaborative filtering and content-based filtering.

Based on the Deployment Insights, the market is segmented into Cloud and On-premise.

  • The cloud segment accounted for the largest revenue share of over 85.0% in 2020 and is projected to register the highest CAGR over the forecast period. This can be attributed to the increase in demand from players adopting cloud technologies to integrate recommendation engines onto their web-based applications, including businesses across industries such as media and entertainment and retail.
  • The on-premise segment accounted for the second-largest revenue share in 2020. The growth of this segment can be attributed to the demand for on-premise recommendation systems from large enterprises owing to their higher spending capacity for on-premise infrastructure and data security solutions.

Based on the Application Insights, the market is segmented into Personalized Campaigns and Customer Delivery, Strategy Operations and Planning and Product Planning and Proactive Asset Management.

  • The personalized campaigns and customer delivery segment accounted for the largest revenue share of more than 40.0% in 2020. The dominance of this segment can be accredited to the increase in the need to provide better customer experience and services to customers.
  • The product planning and proactive asset management segment is anticipated to account for the second-largest revenue share by the end of the forecast period. Additionally, this segment is projected to expand at the highest CAGR of 35.1% during the forecast period. The growth of this segment can be mainly attributed to the rising adoption of machine learning and AI technologies by numerous organizations to make better business decisions. These technologies help users generate insights through the data collected from their customers’ choices, preferences, and habits.

Based on the Organization Insights, the market is segmented into Large Organizations and SMEs.

  • The large enterprise segment accounted for the largest revenue share of more than 55.0% in 2020. This can be attributed to the higher demand for recommendation engines from large enterprises to make better decisions, efficiently manage their business portfolio, and gain a competitive edge in the global market.
  • The SMEs segment is projected to exhibit the highest CAGR of 34.6% during the forecast period. The rising need to offer a better user experience in the highly competitive market is driving this segment. The increased need to find alternative solutions for saving marketing and advertising costs due to limited budgets is also boosting the demand for recommendation engines among small and medium organizations.

Based on the End-use Insights, the market is segmented into Information Technology, Healthcare, Retail, BFSI, Media & Entertainment, Others.

  • The retail segment accounted for the largest revenue share of nearly 26.0% in 2020 and is expected to retain its lead over the forecast period. This can be attributed to the growing adoption of recommendation systems by e-commerce and retail organizations to provide better and quick services to their customers owing to the increasing competition in the industry.
  • The information technology segment held the second-largest revenue share in 2020. The BFSI segment is anticipated to expand at the highest CAGR during the forecast period owing to the increased demand from banks to enhance their profit and customer engagement by providing customers various offers based on their profiles.

Recommendation Engine Regional Outlook

  • North America
  • Europe
  • Asia Pacific
  • Latin America
  • Middle East & Africa

Key Companies Profile & Market Share Insights

The market for recommendation engines is fragmented owing to the presence of several global as well as regional players. Key participants are entering into strategic collaborations and partnerships to expand their business footprints and survive the highly competitive environment. Moreover, service providers are spending considerably on research & development activities to incorporate new technologies in their offerings and develop advanced products to gain a competitive advantage over other market players.

Some of the prominent players operating in the global recommendation engine market include,

  • Adobe
  • Amazon Web Services, Inc.
  • Google LLC
  • Hewlett Packard Enterprise Development LP
  • International Business Machines Corporation
  • Intel Corporation
  • Microsoft Corporation
  • Oracle
  • com, Inc.
  • SAP

Order a free sample PDF of the Recommendation Engine Market Intelligence Study, published by Grand View Research.

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