Recommendation Engine Market Size & Share, by Component (Solution, Service); Type (Collaborative Filtering, Content-Based Filtering, Hybrid Recommendation Systems); Deployment (On-Premises, Cloud); Application (Personalized Campaigns & Customer Delivery, Strategy Operations & Planning, Product Planning & Proactive Asset Management); End User (E-Commerce, Gaming, Media & Entertainment, Others) - SWOT Analysis, Competitive Strategic Insights, Regional Trends 2025-2037

  • Report ID: 6055
  • Published Date: Jan 10, 2025
  • Report Format: PDF, PPT

Global Market Size, Forecast, and Trend Highlights Over 2025-2037

Recommendation Engine Market size is expected to rise by USD 91.8 billion between 2025 and 2037, driven by a CAGR of more than 24.7%. The projected industry size of recommendation engine in 2025 is USD 6.75 billion.

The major factor influencing the market expansion is the growing demand for e-commerce owing to the growing adoption of the Internet. For instance, according to the prediction made by the International Telecommunication Union, over 5.4 billion people – or about 67 percent of the population across the globe were utilizing the Internet in 2023. As a result, the adoption of a recommendation engine is set to be adopted by e-commerce companies to boost the engagement of viewers.  


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Recommendation Engine Sector: Growth Drivers and Challenges

Growth Drivers

  • Growing focus of the organization on integrating cloud services - The growing adoption of cloud services is a significant element that is driving the deployment of recommendation engines across various segments. In 2022, over 60% of companies predicted to have used either one or two clouds in their organization. These adoptions of cloud services that rely on processing large volumes of data in real time offer corporations the resources required to provide support recommendation engines.

    The pliability and scalability provided by cloud platforms guide companies to seamlessly employ and scale recommendation engines to meet changing business environment needs and efficiently customize recommendations according to the preferences of individuals. Moreover, cloud-based recommendation engines render a cost-effective solution for companies looking forward to enabling customized recommendation systems with no need for upfront investments in infrastructure.
  • Surge in the trend of the hybrid recommendation model - The hybrid recommendation model trend is gaining importance since it provides more exact and varied suggestions to the users. Hybrid models direct to tame the limitations of individual methods by blending collaborative filtering, content-based filtering, and other techniques, further enhancing recommendation efficacy in different domains.

    Furthermore, businesses that adopt these techniques in their recommendation engines are predicted to be in a better position to offer diverse, hyper-personalized, and engaging experiences that reverberate with present-day consumers seeking modified recommendations around different digital platforms.
  • Growing investment in new technologies - Recommendation engines are getting more advanced due to the recent developments in AI and associated technologies. Moreover, governments across various countries are also investing significantly in promoting digitalization.

    As per the United States Agency for International Development, digital invest has offered USD 8.45 million in U.S. government funding to collaborators who have, in turn, lifted about USD 275 million in investment capital, with close to USD 475 million anticipated. Therefore, as countries are embracing digital technologies the recommendation engine market is foreseen to grow.

Challenges

  • Growing privacy concern - Recommendation engines are used to analyze consumer data, which usually includes preferences, browsing history, and demographic data, to produce altered recommendations. However, this dependency on user’s sensitive data increases concerns regarding unauthorized access, data breaches, and potential misuse of personal data, imposing risks to the privacy of the user. This might further impose restraint on the market expansion.
  • Lack of skilled person to handle recommendation engine
  • Rising imposition of strict regulation - Various strict regulations have been launched by authorities on organizations such as the GDPR in Europe and CCPA in the United States regarding data collection, processing, and storage practices. Non-compliance with these regulations may result in heavy fines, reputational damage, and legal repercussions for companies using recommendation engines.

Recommendation Engine Market: Key Insights

Base Year

2024

Forecast Year

2025-2037

CAGR

24.7%

Base Year Market Size (2024)

USD 5.52 billion USD 97.32 billion

Forecast Year Market Size (2037)

USD 97.32 billion

Regional Scope

  • North America (U.S., and Canada)
  • Asia Pacific (Japan, China, India, Indonesia, South Korea, Malaysia, Australia, Rest of Asia Pacific)
  • Europe (UK, Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Latin America (Mexico, Argentina, Brazil, Rest of Latin America)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)

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Recommendation Engine Segmentation

Type (Collaborative Filtering, Content-Based Filtering, Hybrid Recommendation Systems)

The hybrid recommendation systems segment share in the recommendation engine market is expected to surpass 42% by the end of 2037. This growth of the segment is poised to be influenced by a surge in the number of video-streamers. In 2023, there were over 2 billion video streamers, a high from the year 2020 when streamers totaled over 1 billion. Hence, the demand for hybrid recommendation systems is set to rise owing to its ability to offer more accurate recommendation.

For instance, in case of Netflix, makes an excellent example of a hybrid recommendation system. This is because Netflix provide recommendations by juxtaposing by understanding the watching and searching habits of users and exploring identical users on that platform.

Organization Size (SMEs, Large Enterprises)

The large enterprises segment is anticipated to gather notable revenue in the market over the coming years. Recommender systems have been used commonly to guarantee that the user discovers something new every time. By making sure that the user receives constant recommendations according to their taste, they are estimated to extend their subscription for another month. Hence, large organizations are set to significantly benefit from this solution since they are constantly aiming to expand their business. 

Additionally, the SME segment is also set to have significant growth over the coming years. This growth of the segment is poised to be dominated by rising SME businesses. For instance, the Census Bureau’s Business Dynamics Statistics estimated in 2021 there were 5,358,600 SMEs, up from 5,322,155 in the year 2020 in the US.

Deployment (On-Premises, Cloud)

The cloud segment is estimated to have significant growth in the market over the coming years. Cloud services including Azure, AWS, and Google Cloud offer adaptable infrastructure that enables to regulation of resources based on demand.

Cloud providers offer a varied range of complementary services, which includes data analytics platforms, machine learning tools, and AI services. Users may efficiently adopt these services with the recommendation engine to improve insights, and functionality and drive better recommendations.

Our in-depth analysis of the global market includes the following segments:

 

 

          Component

  • Solution
  • Service
    • Professional
    • Managed

 

 

          Type

  • Collaborative Filtering
  • Content-Based Filtering
  • Hybrid Recommendation Systems

 

          Deployment

  • On-Premises
  • Cloud

 

          Organization Size

  • SMEs
  • Large Enterprises

 

         

          Application

         

  • Personalized Campaigns & Customer Delivery
  • Strategy Operations & Planning
  • Product Planning & Proactive Asset Management

 

         End User

 

         

  • E-Commerce
  • Gaming, Media & Entertainment
  • Advertising & Marketing
  • Healthcare
  • BFSI
  • Education
  • Telecommunication
  • Others

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Recommendation Engine Market - Regional Synopsis

North America industry is predicted to hold largest revenue share of 31.9% by 2037. This growth of the market is set to be dominated by growing disposable income. According to the Bureau of Economic Analysis estimates that personal income in the US increased by USD 122.0 billion in March 2024. Hence, the demand for online shopping is expanding in this region further encouraging the market growth.

Amongst other areas in the North America region, the US is estimated to gather the highest revenue by the end of 2037. This growth is set to be encouraged by the rising presence of key video streaming companies.

The Canadian market for recommendation engines is also set to have notable growth in the market over the forecast period. The major element to influence the market expansion in this nation is the growing demand for game streaming.

APAC Market Analysis

Asia Pacific region in recommendation engine market is estimated to grow at massive CAGR till 2037. This could be on account of the rising number of social media users. Asia-Pacific nations users make up over 2% of all worldwide social media users, the largest concentration across the globe. Furthermore, a growing number of online retail giants is also expected to dominate the market expansion in this region. 

The China market for recommendation engines is estimated to generate the largest revenue by 2037. This growth of revenue is owing to the surging penetration of smartphones. 

The recommendation engine market in India is also set to have notable growth in the market over the forecast period. This rise is set to be influenced by the growing launch of novel recommendation engine solutions.

The South Korea market for recommendation engines is also set to grow on account of the surging emergence of tech-savvy startups. 

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Companies Dominating the Recommendation Engine Landscape

    The major players globally are estimated to have a great influence on the recommendation engine market. This is because these companies are significantly launching new products in the market. Some of these key players include:

    • Recombee
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • Salesforce, Inc.
    • Oracle
    • NEC Corporation
    • Intel Corporation
    • Databricks
    • PIANO SOFTWARE INC
    • Google
    • Amazon Web Services, Inc.
    • Sentient Information Systems B.V.

In the News

  •  Intel launched a novel machine programming (MP) system in concurrence with the Georgia Institute of Technology (Georgia Tech) and Massachusetts Institute of Technology (MIT).
  • NEC Corporation of America (NEC), announced the launch of the new version of its flagship forensic face recognition solution known as NeoFace Reveal Version 5 (Reveal 5). 

Author Credits:  Abhishek Verma


  • Report ID: 6055
  • Published Date: Jan 10, 2025
  • Report Format: PDF, PPT

Frequently Asked Questions (FAQ)

In the year 2025, the industry size of recommendation engine is assessed at USD 6.75 billion.

The recommendation engine market size was valued at USD 5.52 billion in 2024 and is likely to cross USD 97.32 billion by 2037, registering more than 24.7% CAGR during the forecast period i.e., between 2025-2037.

North America industry is predicted to hold largest revenue share of 31.9% by 2037, impelled by growing disposable income in the region.

The major players in the market include Recombee, Salesforce, Inc., Oracle, NEC Corporation, and others.
Recommendation Engine Market Report Scope
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