[Global Network Science and Technology Reporter, Wang Nan] The Internet's excitement often passes unnoticed if you don’t pay close attention.
As a marketing director at a Shenzhen-based speaker manufacturer put it: “Big companies already have their own technical groundwork and can react immediately when opportunities arise. We can only follow in their footsteps and progress gradually.â€
Three years ago, with the release of Amazon’s smart speaker Echo, the market for Alexa-integrated smart speakers ignited instantly.
In March 2015, just four months after Amazon Echo hit the shelves, Jingdong launched its first speaker.
On April 25th, Tencent introduced its "Intel Tencent Jingle," an intelligent voice assistant (its development team falls under MIG, the mobile internet business group) and is inspired by Amazon’s Alexa.
On April 28th, Baidu and Xiaoyu jointly launched the new AI video-calling robot "Split Fish" at home, powered by Baidu's conversational AI system, DuerOS.
July 5th marked Baidu's AI Developer Conference, where the DuerOS open platform was officially unveiled.
On the same day, Alibaba’s Artificial Intelligence Lab also released the AliGenie platform and its independently developed smart speaker, the Tmall Genie X1, featuring Chinese speech understanding engines.
At this point, the BATJ camps had all gathered in the smart speaker space.
The official rise of China's smart speaker market began in the second half of 2016, driven by the steep increase in Amazon Echo sales.
According to Slice Intelligence's online statistics, Echo's sales experienced a sharp spike starting October 2015, peaking in November of the same year.
Of course, the physical form of the speaker isn't the main focus. What attracted many players, particularly large ones, was Amazon's pioneering work in intelligent voice systems. In the last six months, 7,000 companies have exhibited at CES in the U.S., with almost all Alexa skills surpassing 15,000. This demonstrates the vast potential of the platform behind smart speakers.
"Within one kilometer of Shenzhen’s Nanshan District, there are 112 companies working on voice intelligence," General Manager Li Haibo of Himalayan FM’s hardware division has recently noted. "These companies aren’t sure where the market is or who the users are—they just know the trend is coming, and they have to stay ahead."
As soon as the buzz started, orders flooded in. But once the market cooled, a large number of over-capacity and early-stage pipeline resources could only be absorbed by the supply chain.
"At the time, there was no mature intelligent technology solution on the market, and voice interaction technology wasn't as popular as it is today. A 'good' smart speaker back then was simply one that could respond to your dialogues and be controlled via Bluetooth or Wi-Fi," said Xiao Zhang, a staff member at a Shenzhen-based smart speaker manufacturer. "Although it was far from the capabilities of Echo, being responsive and reliable in a fast-paced environment was crucial."
Soon, the company organized and mass-produced such smart speakers, launching them quickly onto the market. Initially, they managed to attract some buyers. However, the sales plummeted dramatically in the following months. In the first month, they sold over a thousand units, but then sales dropped to hundreds per month. Eventually, they couldn’t sell any more. "To date, the company has thousands of units sitting in warehouses, untouched."
In Shenzhen, many companies that initially manufactured tablets or mobile phones switched to smart speakers. Some of these companies sold only a few hundred units a month and had to shut down after a few months.
Down the supply chain, foundries are scrambling for even a small market share, sometimes operating at a loss.
So, what exactly can a smart speaker do? Using commands, you can turn on lights, adjust air conditioner temperatures, control TV volumes, adjust curtains, play movies, and more. You can simply give a voice command, and it can suggest the nearest cinema, book tickets, and even call a ride for you. All of this happens without you needing to pick up your phone—you just talk and the speaker handles the rest.
However, our reporter discovered that searching for "smart speaker" on Taobao reveals a wide range of related products. Prices vary from a few yuan to tens of thousands, and without professional knowledge, it’s hard for consumers to differentiate between truly smart and merely gimmicky ones.
Many speakers that claim to be "smart" only feature flashy lighting or unusual designs, pretending to be cutting-edge technology. However, in practice, they lack true intelligence. Their functions are simplistic, offering little more than playing music via a mobile phone—far from the capabilities of Echo.
"The technology for conversational Chinese understanding remains immature," said Gartner analyst Tracy Tsai. She highlighted that speech recognition in Chinese smart speakers is still flawed, which is a key reason why the Chinese market hasn't fully embraced smart speakers.
Bloomberg reported on July 16 that China’s AI audio equipment market is still in its infancy. Market research firm Counterpoint Research predicts that 2 million smart speakers will enter the Chinese market this year, compared to 14 million in the U.S.
Horizon Robotics CEO and Baidu Deep Learning Institute founder pointed out another reason why smart speakers haven't dominated China's largest retail market: many people, especially young workers, rarely have time to listen to smart speakers at home.
In the U.S., Echo's most common use cases include providing information at bedtime and kitchen control. In China, these scenarios don’t align with local conditions, and the ecosystem of connected smart home devices isn’t robust enough to create demand. The unnaturalness of these scenarios and the underdeveloped central control market explain why the domestic smart speaker market has been lukewarm.
Industry sources note that the wave following Echo's release, or after Apple's HomePod, didn’t spark a true consumer boom because the use cases haven’t been refined. While some tech enthusiasts might adopt these smart speakers, the sales figures remain far below those overseas.
Technology alone doesn’t sell, nor do consumers buy blindly. These factors combined have led to the current state of smart speaker products in the domestic market.
Based on monthly sales data from Taobao (including Tmall) e-commerce platforms, a total of 17,645 units were analyzed to calculate the market share of each brand. Xiaomi accounted for 26% of internet sales, with the top three brands collectively holding over half the market. The remaining brands had low participation. Overall, the outlook for smart speakers in the domestic market isn’t promising. At least, markets with monthly sales under 20,000 units and annual sales of less than 1 million units are unlikely to sustain large-scale investments.
Liu De, Xiaomi's co-founder, sees smart speakers as a supplementary function for mobile phones.
"This is complementary. Smart speakers can never replace the centrality of the phone, so it’s not a substitution. Smart speakers are a fascinating new thing, adding functionality to phones. In the U.S., many households need music and the ambient setting differs from China. The demand for music among Chinese users isn’t as strong as in the U.S. There’s a slight difference in market needs, so there’s uncertainty here, and we need to explore further."
"Success hinges on resources," Liu De emphasized. Smart speakers and other hardware products differ in terms of requirements, such as music library content (which demands copyrighted music libraries). This tests the strength of each player. "How do you integrate more authentic music? After all, there are only a limited number of platforms in China that can offer genuine music, so resource integration is key."
For the future of smart speakers, industry insiders stated that having voice interaction capability is the first step toward making speakers smart. The next step is to use voice interaction to complete usage scenarios encountered in everyday consumer life. Smart speakers have immense potential.
While no one can predict how far smart speakers will evolve, they may well be the best representation of speech interaction. In the development of voice interaction, smart speakers may not be the sole terminal, but they are indispensable. They can’t replace smart machines, but their development and voice interaction, along with AI, should complement each other.
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