Alibaba Sells 1 Million Smart Speakers in Four Months
Alibaba announced recently that it sold 1 million Tmall Genie X1 smart speakers in just the last four months of 2017. It also said that there are now over 100 “skills” or voice apps for its AliGenie voice assistant. The company launched the Tmall Genie X1 in limited release in July 2017 and it became more generally available to the public last fall. Alibaba also announced in October that the Genie X1 would be installed in 100,000 Marriott hotel rooms in China. It is not clear whether those units are part of the 1 million sold or if they will be incremental sales for 2018.
Double the Estimated Sales Reported by Analysts
It is notable that this information was released prior to Strategy Analytics’ report on Q4 global smart speaker sales. That report is the first that quantified Alibaba Genie X1 sales and put the Q4 number at 500,000 and 2.4% global market share.
There are at least two reasons why these numbers may be different. First, Alibaba is reporting the last four months of the year which includes at least one month of Q3 2017 and Strategy Analytics released sales data that breaks out Alibaba for Q4 only. That could account for at least half of the difference. Second, Strategy Analytics reports on shipments direct to consumer or to retail. It could be that Alibaba is reporting orders, some of which may not have shipped. For example, the 100,000 Genie X1 smart speakers that were announced for Marriott may have been ordered, but not shipped in 2017. I have reached out to Strategy Analytics for comment on the difference and will update this article as appropriate.
Alibaba Takes the Lead in China’s Smart Speaker Market
Regardless of where the final number lands, it is impressive that Alibaba was able to drive demand so quickly. Two of the key differentiators Alibaba stressed in their announcement was that the size of the smart speaker is compact and the price point is reasonable. The chart below shows pricing in Yuan for a number of smart speakers, several of which are not available in China. However, Raven H from Baidu is a close competitor and the Genie X1 is less than one-third the price at just under US$80.
However, Alibaba’s low-price leadership was short-lived. In late December, Xiaomi launched Yeelight which is a Cortana-powered, Mandarin-speaking smart speaker priced at 199 Yuan or about US$30. It looks nearly identical to an Amazon Echo Dot. Xiaomi also has the Mi AI smart speaker priced at 299 Yuan that launched in July but Alibaba chose not to draw attention to that competitor. At CES, Baidu doubled down on its high-end approach to the market by showcasing the Raven H and announcing a new smart speaker integrated light and new smart display, the VS1.
Smart speakers are just emerging in China, but it is clear the market is already very competitive. Alibaba is showing that it has early momentum and intends to replicate the model Amazon has pioneered around Alexa in the U.S.