Summary of Smart Speaker Market in China in 2019 and Forecast in 2020

According to the Chinese Smart Speakers Retail Market Monthly Tracker by RUNTO, the sales volume of China's Smart Speakers Market in 2019 was 36.64 million units, up 125% year on year. The market volume was 7.44 billion yuan, up 104% year on year.

1. Brand: high concentration, dominated by giants

Since the second half of 2018, Tmall, baidu and xiaomi have been firmly in the top three positions. According to RUNTO, the market share of the three brands reached 92 percent in 2019. The core factor of market monopoly still lies in price. With extremely high cost performance and continuous price subsidies, the three brands have been able to quickly occupy the market, which also drives the smart speaker industry in China to advance by leaps and leaps.

Under the giant fierce battle, the market is rapidly mature, the new product education market time is greatly shortened; On the other hand, pull the industry threshold, speed up the speed of market reshuffle. Although new brands will enter the market in 2019, most of them are crossover brands like VIDDA, 360 and midea, or traditional speaker brands like Marshall. Small and medium-sized brands are already rare.

2. Products: the intelligent speaker has entered the era of screen, and the product functions are increasingly rich

According to online data from RUNTO, the number of screen speakers sold in China's smart speaker market reached 14 in 2019, with a share of 13.9 percent, up 12.1 percentage points from last year, including more than 20 percent in December. The reason for the rapid development of screen speakers is that on the one hand, they benefit from the decline in price, on the other hand, they can carry more content and services, and can penetrate more life scenes, which are welcomed by manufacturers and consumers.

With the rapid development of the market and the continuous progress of technology, the product features are more and more rich. Custom wake up words can change the wake up words set by the smart speaker to make it "customized"; Voice shopping further liberates the user's hands and broadens the use of the scene; Voice print recognition can intelligently identify the identities of different speakers and respond accordingly. Voice calls save the elderly and children the process of learning to operate a mobile phone; Multiple rounds of dialogue can be realized to call a continuous dialogue with it; Infrared remote control by equipped with infrared transmitter, can realize the intelligent linkage with traditional home appliances.

3. Channel: with the rise of offline channels, operators are the main driving force

According to RUNTO, offline channels accounted for 38 per cent of sales in 2019, up from less than 10 per cent in 2018. Offline retail channels mainly include home appliance chain stores, 3C chain stores, brand experience/stores, and operator business halls, among which operator channels are the main driving force for the rapid growth of offline market scale.

In terms of products, operators have reached in-depth cooperation with brands such as Tmall spirit, baidu and himalaya. The brand side provides customized products for them. Meanwhile, operators also launch their own brand products. At the sales level, operators can get a smart speaker for free by bundling with certain packages or charging a certain amount of money, which stimulates consumers' desire for business.

4. Marketing: customization & sponsorship, reaching consumers in an all-round way

IP customization is becoming a trend, culture class, star class, animation class IP emerge in endlessly. Cross-border cooperation can bring new elements to the brand, preempt user usage scenarios, and generate brand superposition effect. In 2019, Tmall spirit launched IP customized sugar cube R, the number of which reached 11.

Sponsorships is another way of marketing, represented by baidu, first with the Spring Festival gala in 2019 exclusive interactive cooperation, then sponsored by hunan satellite TV "for life" "my dear inn" cloud time every day and other variety shows, through demonstration, star effect, achieve the purpose of rapid spread, and to raise their awareness and product sales.

2020 forecast: challenges and opportunities coexist

In 2020, the development of the smart speaker market in China will face both opportunities and challenges, which are mainly reflected in the following aspects: 2. The household penetration rate of smart speakers in China is low, only 13%, which still has a lot of room for improvement. Moreover, more and more consumers start to buy the second smart speaker. 3. Product functions are constantly upgraded, with wireless charging, one-touch sound transmission, intelligent screen projection and other functions emerging to meet the differentiated needs of consumers; 4. The rural market is rising and sinking with huge potential, and the demand of left-behind children and empty-nesters has been opened.

The rapidly developing smart speaker market is still full of challenges: 1. Price war is an important means in the early stage of smart speaker development, but the subsidy cannot be sustained, and enterprises need to return to profitability; 2. 2. The "black swan" event of the new coronary pneumonia will affect the market supply and consumer enthusiasm in the short term; 3. Product technology and consumer experience still need to be improved, such as privacy disclosure, suicide persuasion and other events will cause a crisis of trust, and the inability to identify dialects, control the number of household appliances and so on will affect the frequency of consumer use; 4. Operators cut subsidies for smart terminals such as mobile phones and set-top boxes, or the offline market may shrink.

RUNTO believes the smart speaker market in China will reach 49.1 million units in 2020, a 34 percent year-on-year growth.

The Chinese Smart Speakers Retail Market Monthly Tracker from RUNTO provides Monthly updates on the Retail data of the overall Market and the online Market in terms of Retail volume size, sub-channel, brand and product type, as well as the best-selling models and price trends.