Retail

Chinese Smart Speaker Shipments Reach 16.8M

China

Smart speaker sales continue to grow at a record pace, and new data shows that China is now the leader in that market, accounting for 52 percent of the total growth worldwide.

The latest report from Canalys shows that China became the growth engine this quarter, contributing 52 percent to worldwide volume growth, compared to 16 percent from the U.S. Alibaba and Xiaomi ranked third and fourth overall, shipping 3 million and 2 million smart speakers respectively.

The two companies accounted for nearly 90 percent of the market in China. Alibaba had a market share of over 50 percent, securing the top spot with 3 million shipments of its Tmall Genie speakers in Q2 2018. And with the release of its Xiaoai Mini AI smart speaker, Xiaomi saw 228 percent sequential growth and shipped a total of 2 million units.

“China’s smart speaker market has quickly become a battlefield for only the big names, and it will be hard for the smaller players to catch up in terms of market share,” Hattie He, Canalys Research Analyst, said in a press release. “Alibaba and Xiaomi have both relied on aggressive price cuts to create demand. Both companies have the financial backing to spend on marketing and hardware subsidies in a bid to quickly build their user bases. Although the real level of user demand for speaker products is currently unproven, China is on its way to overtake the U.S. in the near term. The challenge remains for local vendors to increase user stickiness and generate revenue from the growing installed base of smart speaker users.”

And while Amazon and Google gained from international market expansion into Europe and Asia, both still rely on the U.S., which accounted for 68 percent of Amazon’s global shipments and 58 percent of Google’s.

“Many players, including Amazon, are integrating smart speakers into verticals, such as hotels, retail, hospitals and other business establishments,” said Jason Low, Senior Analyst at Canalys. “On the other hand, vendors are experimenting with new form factors and functionalities with smart speakers. Network operators in South Korea integrated smart speakers into set-top boxes and can add new lifestyle and entertainment services on top of IPTV, powered by voice and video. Looking ahead, the focus will be on uncovering the full potential of smart assistants, a direction set by Amazon and Google and echoed by many local market leaders. We will soon enter an era where smart assistants will require a new form of hardware medium more effective than speakers to advance further.”

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