If you live in North America, and you think about “smart speakers” at all, you probably see them as a binary choice: You have to pick a device that’s powered by either Google or Alexa. But new statistics expose just how much of a bubble the American market is — China’s Baidu just rocketed past Google as the No. 2 manufacturer of smart speakers in the world, behind Amazon.
In the latest numbers from market analytics company Canalys, Baidu ousted Google from the No. 2 spot on the worldwide market, with 4.5 million units sold to Google’s 4.3 million in Q2 2019. What’s astonishing is how fast it’s rising — that sales number is 3,700% larger than where the Chinese firm was last year. And Chinese e-retailer Alibaba is hot on Google’s heels with 4.1 million in Q2, and Xiaomi is next with 2.8 million.
Clearly, the growth of smart speakers in China is anything but slow. Baidu, Alibaba, and Xiaomi (loose proxies for China’s Twitter, Amazon, and Apple, respectively) are all rising fast. Adoption of smart speakers is accelerating in China while it’s actually dropping slightly in the U.S. Canalys says the American market actually dropped more than 2% in the last quarter, and Google’s sales fell an eye-opening 19.8% year over year.
Besides serving as an “Oh yeah, China!” reminder, the market stats validate the point of view that Chinese users engage with smart speakers differently, and need less convincing of their utility. Chinese use of voice assistants, which have been rising for a while now, is a strong sign that voice commerce — that is, buying stuff with your voice — is a key use case in the region, whereas only a small portion of Alexa users have used the assistant to make a purchase (a report from The Information in 2018 suggested it was a paltry 2%). Users in Asian markets also tend to be more comfortable interacting via voice in general — in one case, a user had a four-hour conversation with an AI personality created by Microsoft and Xiaomi.
There’s no need for Amazon and Google to panic just yet. The two are effectively banned from operating in China, so Baidu et al. don’t compete head-to-head with them in many Asian markets, and those companies are barely a drop in the bucket in the U.S., if they compete at all. And Amazon continues to sell its affordable Echo devices by the boatload; the Echo Dot was one of the best-selling products on Amazon during Prime Day 2019.
Still, when looking at the long game of the smart home, it’s useful to take in the global picture. While the world of home automation is greater than just voice assistants and smart speakers, there’s no question they’re an important part of the equation — it’s hard to imagine a smart home without seamless voice control of all your devices and services. Amazon and Google have done a lot to cement that vision into the minds of Americans. However, China’s tech titans might be doing a better job, and if their momentum continues, they may end up having more say in what the smart home of the future looks like.
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