China’s smart speaker market ‘exploding,’ strong trajectory to continue: report

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A Xiaomi smart home display alongside its AI Speaker HD at a Xiaomi store in Dongcheng, Beijing on July 7, 2019. (Image credit: TechNode/Wei Sheng)

There are around 35 million households with smart speakers in China, and the device’s popularity is increasing rapidly, according to a report released by market research firm Strategy Analytics on Thursday, with some 59% of respondents saying that they can’t imagine living without the gadget.

Why it matters: In the two years since its emergence in the Chinese market, smart speakers have evolved from niche gadgets into one of the most popular electronic devices in Chinese households, making the country the largest market for the product worldwide.

  • The device’s popularity is partially due to a price war between Chinese tech giants including Alibaba, Baidu, and Xiaomi, slashing average prices to under $20 from about $100 in 2017.

“The Chinese market for smart speakers is growing extremely rapidly and this research shows that Chinese consumers love the convenience and entertainment value which smart speakers offer. If what Chinese people say turns out to be true, smart speakers will be in the vast majority of households within the next few years.”

⁠—David Watkins, director of smart speakers and screens at Strategy Analytics

Details: Around 63% of the individuals surveyed who do not currently use a smart speaker plan to buy one within the next year, said the report. Another 22% said they planned to purchase one later.

  • Xiaomi is the most well-known brand, with 71% of consumers surveyed recognizing the smartphone maker as having a smart speaker on offer, compared with Huawei at 53%, Baidu at 47%, and Alibaba at 37%.
  • More than half of the 1,044 respondents own more than one smart speaker, not unusual in the Chinese market where smart displays account for a third of smart speakers in households.

China’s tech giants battle for smart speaker supremacy as price war rages on

Context: In April, it was reported that Amazon, the world’s largest seller of smart speakers, hired thousands of workers to listen to voice commands from some of its Echo smart speaker users.

  • The news sparked privacy concerns among consumers that smart speakers are eavesdropping on conversations. These fears did little to slow worldwide sales, which grew 55% year on year to 26.1 million units in the second quarter, according to research firm Canalys.
  • Total shipments in China’s smart speaker market nearly doubled to 12.6 million units in the second quarter, more than twice as large as the US market which shipped 6.1 million units during the same period.
  • Baidu, China’s search engine giant, replaced Google in Q2 as the world’s second-largest smart speaker vendor after sales surged 3700% year on year to 4.5 million units.