The global recommendation engine market size is expected to reach USD 33.23 billion by 2030, registering a CAGR of 36.3% from 2024 to 2030, according to a new report by Grand View Research, Inc. 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.

The COVID-19 pandemic compelled governments across various countries to take immediate actions and impose partial or full lockdowns. This impacted various industries in numerous ways. Social distancing rules and traveling restrictions shifted people away from physical shops for buying essentials to the digital medium, which resulted in the increased demand for online shopping platforms. Hence, the pandemic created a lucrative opportunity for the market.

A recommendation engine, a type of data filtering tool, uses Machine Learning (ML)-based processes to suggest relevant and specific items to customers. It typically comprises two types of systems, namely a personalized recommendation system and a non-personalized recommendation system. The tool gathers consumer behavior data to find patterns in it, based on which it offers numerous recommendations to users.

The market has also benefitted from the growth in digitization trends across numerous industries, especially retail, e-commerce, and media and entertainment. For instance, according to a survey by Episerver, approximately 44% of the U.S. population shops using Amazon.com, Inc.’s recommendations.

Recommendation engine system providers are investing in research & development activities to introduce innovations in the market and offer a better experience to users. Additionally, the growing competition is driving innovations in the market.

Recommendation Engine Market Report Highlights

• Collaborative filtering held the dominant market share in 2023 owing to the increasing demand for personalized user experiences across various industries.
• The cloud segment dominated the market with 87.7% in 2023. Cloud-based recommendation engines allow businesses to scale their operations seamlessly, accommodating growing data volumes and user bases without significant infrastructure investments.
• Large enterprises held the largest market share in 2023 owing to the growing need to make better decisions, efficiently manage their business portfolio, and gain a competitive edge in the global market.
• The personalized campaigns and customer delivery segment accounted for the largest revenue share of 42.0% in 2023.
• The retail segment dominated the market with 25.0% share in 2023. The market surge can be attributed to the rapid digital transformation within the retail industry that has led to an increased adoption of recommendation engines to enhance customer experience and engagement.

Recommendation Engine Market Segmentation

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

Recommendation Engine Type Outlook (Revenue, USD Million, 2018 - 2030)

• Collaborative Filtering
• Content Based Filtering
• Hybrid Recommendation

Recommendation Engine Deployment Outlook (Revenue, USD Million, 2018 - 2030)

• Cloud
• On-Premise

Recommendation Engine Organization Outlook (Revenue, USD Million, 2018 - 2030)

• SMEs
• Large Enterprises

Recommendation Engine Application Outlook (Revenue, USD Million, 2018 - 2030)

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

Recommendation Engine End-use Outlook (Revenue, USD Million, 2018 - 2030)

• Information Technology
• Healthcare
• Retail
• BFSI
• Media & Entertainment
• Others

Recommendation Engine Regional Outlook (Revenue, USD Million, 2018 - 2030)

• North America
  • US
  • Canada
  • Mexico
• Europe
  • UK
  • Germany
  • France
• Asia Pacific
  • China
  • Japan
  • India
  • Australia
  • South Korea
• Latin America
  • Brazil
• Middle East and Africa (MEA)
  • South Africa
  • Saudi Arabia
  • UAE

List of Key Players

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

Recent Development

• In January 2024, SAP SE launched new AI-powered features designed to help retailers streamline their business operations, boost profitability, and enhance customer loyalty.

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