China’s smart speaker market became a three-horse race in Q3, as Baidu challenged the dominance of Alibaba and Xiaomi as the launch of a new line of speakers in Q2 bore fruit, Canalys revealed.
Baidu shipped 1 million units in Q3, ranking it in third place behind Alibaba (2.2 million) and Xiaomi (1.9 million). Total smart speaker shipments during the quarter stood at 5.8 million units.
The market barely existed in in Q3 2017 (see chart right, click to enlarge), making year-on-year comparisons of shipments largely meaningless. On a sequential basis, the total market was up 1 per cent; Alibaba’s shipments declined 26 per cent; Xiaomi’s fell 6 per cent; and Baidu’s grew 711 per cent.
Canalys explained Baidu recently shifted its strategy to the mass market from premium devices: its first-generation Raven H smart speaker was priced CNY1,699 ($246) when it was launched and did not perform well, but the company’s latest model, Xiao DU, retails for CNY249 and is currently available for a promotional price of CNY89.
Mo Jia, Canalys analyst said the third quarter proved the perfect time for vendors to try out new sales tactics beyond just price promotion. For example, Alibaba started bundling smart speakers with products from home appliance makers including Midea, Haier and AUX, enabling consumers to control products via the Tmall Genie speaker.
Xiaomi benefitted from a sales channel blending online and offline: Jia said the approach enabled the vendor to maintain stable shipments “with no major online sales event”, with the retail side catered for by its new low-cost Mini speaker.
Canalys forecast explosive smart speaker growth in Q4, backed by another round of aggressive marketing and promotional campaigns focusing on lower prices and more appealing bundles during the shopping festivals in the next few months.
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