Smart speaker industry market analysis: Sales volume surges, is there a promising future?

According to data released by Strategy Analytics, an international market research company, global smart speaker shipments reached 55.7 million units in the fourth quarter of 2019. The total shipments of smart speakers in 2019 reached 146.9 million units, a year-on-year increase of 70.4%. The global smart speaker market continues to maintain a high growth trend.

Judging from the specific brand rankings, Amazon and Google are still in the leading position in the global smart speaker market. In the fourth quarter of 2019, Amazon shipped 15.8 million units, with a market share of 28.3%; Google's smart speaker shipments also reached 13.9 million units, with a market share of 24.9%. In addition, the top 6 companies on the list include Baidu, Alibaba, Xiaomi, and Apple. From the year-on-year growth rate comparison, Baidu and Xiaomi's shipments in the fourth quarter of 2019 showed a significant increase.

Source: Prospective Industry Research Institute

In terms of shipments for the whole year of 2019, Amazon accounted for 29.2%, still maintaining its leading position in the world. The proportion of Chinese brands in global smart speaker shipments has increased significantly.

According to the analysis of Canalys, an internationally renowned research structure, the United States has remained the world's largest smart speaker market as of the end of 2018. In Q1 2019, China's smart speaker sales have surpassed the United States to become the world's largest smart speaker market.

In addition, according to AVC's omni-channel data, the sales volume of China's smart speaker market in 2019 was 36.822 million units, a year-on-year increase of 126.6%, and sales revenue was 6.91 billion yuan, a year-on-year increase of 89.3%.

Is sales volume really important for the current smart speaker industry?

The Chinese smart speaker market grew rapidly in 2018. The main reason for the high growth of smart speakers is the continued high subsidies from giants. The price war has stimulated consumers' purchasing desire and promoted the development of Internet manufacturers. However, simply selling them cannot become an important driving force for market development.

Selling smart speakers is just the first step. Driving the smart home industry is what the giants want. To be precise, driving the intelligent upgrade of China's home furnishing industry in the longer term is the right path.

In 2020, China's smart speaker market will maintain its growth momentum, with sales of 48.2 million units and sales of 8.79 billion yuan. It can be seen that the rapid growth of China's smart speakers will continue to drive the development of the global smart speaker industry.

Judging from the global share of manufacturers, Baidu has become the third largest smart speaker brand in the world and the largest in China. At the same time, according to data from AVC, in 2019, the concentration of China's smart speaker industry was relatively high, with the market mainly concentrated in Xiaodu, Tmall Genie and Xiaomi.

Where is the blue ocean for smart speakers?

The reason why it is meaningless to compete in sales at this stage is that there are more important propositions facing Alibaba, Baidu and Xiaomi.

The current smart speaker industry is popular with investors because of two blue oceans. One is that although the shipment volume of domestic smart speakers has grown rapidly, the penetration rate is very low; the other is that the small and medium-sized home appliance market is booming.

Research data from GSK HSBC Securities shows that domestic smart speaker shipments increased significantly in 2018, reaching 16.25 million units. However, the high shipment volume of domestic smart speakers is more due to the huge labor base, and the penetration rate of smart speakers is still far behind that of the United States.

According to techspot, from 2017 to 2018, the penetration rate of smart speakers in the United States increased from 21.5% to 41%, while the domestic smart speaker penetration rate was only 1.02% as of June 2018.

This means that the domestic smart speaker market has just started. Smart speakers are an ideal entry point for the Internet of Things, and the industry opportunities behind them are huge.

Another blue ocean is the intelligent upgrading of the small and medium-sized household appliances market. The large demand for small and medium-sized household appliances is one reason, but in fact, it also has another significant feature: high-frequency operation.

What does high-frequency operation mean? The demand for convenience, simplicity, and easy control is stronger. Compared with traditional remote controls and manual switches, the voice interaction of smart speakers is obviously easier to use, which has also given rise to intelligent upgrades.

In the future, the smart speaker market is bound to become more popular. But from a longer-term perspective, what is important is how big an ecosystem and social value smart speakers can create.