A2P Messaging Market Insights and Analysis

The global A2P messaging market is set to grow exponentially. In 2021, the market was valued at close to USD 65 billion, with a compound annual growth rate (CAGR) of 4.7% from 2022 to 2030. This growth is attributed to A2P’s low-cost and extensive reach with great customer acquisition rates and engagement. Therefore, enterprises look at A2P to boost their growth.

A2P messaging witnessed significant growth thanks to its adoption in different industries like BFSI, healthcare, e-commerce, retail, etc. These industries responded positively to A2P messaging as it helped them better their communication with their customers, deliver essential SMSs at the right time and even enabled them to authenticate users and devices.

A2P messaging also supports bulk messaging services, enabling enterprises to communicate with their customers worldwide at the same time. A2P messaging offers a centralised mechanism for messaging services globally without requiring agreements with all of the destination operators. This helps improve customer relationships, guarantees better connectivity, and increases sales.

A2P messaging’s growth can be attributed to elements like end users’ growing emphasis on A2P messaging, the penetration of mobile advertising, and the growth of smartphones worldwide. Due to the increasing adoption of internet services and the inclusion of OTT messaging platforms like Facebook Messenger and WhatsApp, which are useful for attracting and retaining new clients, the business is growing.

A2P messaging has to follow a set of regulations at regional and national levels. For instance, the Telephone Consumer Protection Act (TCPA) regulations governing A2P communications must be complied with, subject to certain restrictions. The FCC regulations prevent over-messaging and match broadcast channels with message content, such as message priority and timeliness.

Insights on Deployment Mode

The market is divided into cloud and on-premises deployment modes. With a predicted CAGR of 5.4% during the forecast period, the cloud sector is expected to continue to dominate the market with a revenue share of over 56% in 2021. Easy deployment and scalability are features of cloud systems which help with improving your A2P messaging campaigns

An efficient, integrated marketing campaign that supports rising customer interaction is made possible by cloud-based A2P messaging. Cloud-based platforms make it simple to combine SMS, MMS, phone, and other services to provide a secure mobile messaging experience, which promotes the expansion of this market.

Insights on Enterprise Size

The enterprise market is divided into large and, small & medium-sized businesses. Large enterprises had the largest revenue share, with a revenue share of over 61% in 2021 and a CAGR of 4.0% during the forecast period. Increased marketing budgets, a strong emphasis on SMS marketing, as well as significant investments and spending are all responsible for the expansion.

The pandemic has brought on significant changes in consumer behaviour and shopping patterns. A2P messaging is becoming more widely used because it can increase brand recognition, customer satisfaction, and response. During the forecast period of 2022-2030, small & medium enterprises are expected to grow at a CAGR of 5.8%. This is because small and medium-sized businesses frequently use A2P messaging to describe a wide range of products and updates and for promotional activities.

SMS traffic Insights

The SMS market is divided into two categories: national and international, where 55% of sales in 2021 came from the national category. The national category also experienced a CAGR of 4.2% over the projection period. The national and domestic traffic has significantly grown throughout the pandemic. With stores and shops closing, sectors like retail marketing suffered forfeiture; nevertheless, the rise in transactions, alerts, and notifications resulted in message traffic following the pace of e-commerce growth.

Vertical Insights

The market is divided into the following verticals: BFSI, healthcare, media & entertainment, retail & e-commerce, travel & tourism, and others. With a CAGR of 3.5% during the predicted period, the BFSI held the top revenue share with over 29% in 2021. The increase in payment transactions and the use of online A2P messaging in the BFSI sector are credited with driving the segment’s growth.

Banks and financial organisations use A2P messaging to send notifications, one-time passwords, balance statements, and anti-fraud alerts. Media & entertainment is forecast to grow at the fastest rate during the forecast period, with a CAGR of 6.7%.