Smart home devices and smart speakers are becoming more and more popular in China. Many brands are trying to attract Chinese users by developing more functions for their smart speakers. A comprehensive presentation on the smart home devices market in China, targeted towards foreign brands interested in entering China's market by Daxue Consulting.
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The smart home devices market in China by Daxue consulting
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2019 DAXUE CONSULTING
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THESMARTHOME
DEVICESMARKETIN
CHINA
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China’s smart home devices market has large potential
The market for smart home devices is
consistently rising in China
Smart speakers are used as the control
centers of all smart home devices
Improving the understanding of smart
speakers is a major task
Large domestic brands are focusing on
cheap products
Online and offline are both important distribution
channels
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History of the smart
home devices
market in China
2004 2014 2015-2017 2018
Haier (海尔) was a pioneer
started to develop its smart
home products, but most
consumers were unfamiliar
with smart home devices
Smallzhi (小智) smart
speaker was
launched as the first
smart speaker in
China
JD, Xiaomi, Alibaba and other
high-tech companies started to
release their smart home
devices, including smart
speakers
More large brands, such as
Baidu, entered this market and
launched new arrivals. The smart
home devices market is gradually
dominated by big brands
China’s smart home devices consist of smart speakers,
smart fridges, cleaning robots and other smart appliances.
The market is growing very fast in China.
Among all kinds of smart devices, smart speakers are the
most popular ones in China’s market, although many
buyers only use them to play music. This report will focus
on China’s smart speakers.
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Market drivers for international brands in China
1.
2.
3.
4.
5.
Continuously developing AI technologies
More people are interested in smart home devices
More functions have been created
'International brands' products have better performance
Cross-border e-commerce platforms reduce market barriers
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CONSUMPTION
ANALYSIS
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Consumption and
market size in China
Smart speakers usually have two features: voice control
through mobile apps and providing versatile services by
Internet (music, news and etc.).
Good users experience, “consumption upgrade” and
relatively low prices are the main reasons for the fast growth
of China’s smart speakers market.
140
200
330
680
2016 2017 2018 2019F
Market size of smart speakers in China
(million RMB – 2016-2019)
Source: chyxx.com
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Consumer analysis:
married couples
with kids are the
main users
Married couples and families with children are the main
buyers of smart speakers in China.
Smart speakers generally have functions for kids, such
as answering questions and story telling. These functions
attract Chinese parents who are raising children on a
busy schedule.
Married and
have children
49%
Married but no
children
19%
Unmarried
32%
The family situation of China’s smart speakers
users (2018)
Source: Ark. Analysys.cn
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Consumer analysis:
smart speakers are
mostly used in the
living room
In China, consumers usually use smart speakers in their
living room where they can enjoy music with family and
easily control other smart home devices.
The kitchen is the second most common place that
consumers use smart speakers, some users like listening
to music, radio and news when they are cooking.
12.0%
12.0%
24.0%
52.0%
Other room
Bedroom
Kitchen
Living room
Where consumers use smart speakers in
their home (2018)
Source: chyxx.com
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Consumer analysis:
music is still the
most useful function
of smart speakers
Although smart speakers have many different functions,
listening to music is still the primary use. Voice control is
another important reason, talking with smart speakers
can give consumers a feeling of novelty.
12%
36%
44%
48%
63%
77%
86%
87%
90%
Helping elderly
For children
Listen to talking shows and sports evets
Control smart home devices
Alarm clock
News
Interesting tools
Voice control
Music
The main reasons make Chinese people buy smart
speakers (2018)
Source:
Toutiao.1688.com
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Baidu Index –
Interest trends
toward the
segments (1/2)
The number of searches for smart home
sharply rose and reached a high point in
March when Huawei launched a smart home
forum in Shanghai.
The number of searches for smart speaker
reached the highest point during June 2018
for Baidu launched its own smart speakers.
The search frequency of “smart
speaker” from February 2018
to February 2019 on Baidu
index
Baidu is the #1 search
engine in China. The
volume of search
(more than ¾ of the
total search made on
Chinese Internet)
exhibits the market
digital trends
The search frequency of “smart
home” from February 2018 to
February 2019 on Baidu index
2018 Chinese
New Year
Smart home forum
launched by Huawei
Baidu launched its
smart speaker brand
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Baidu Index –
Interest trends
toward the
segments (2/2)
The number of searches of smart appliances
reached its highest point in early March due to
the AWM (Appliance & electronics World
Expo) 2018 in Shanghai.
The search index for smart TV was high
during February 2018 when its privacy and
security issues were exposed by the news.
The search frequency of “smart
appliances” from February
2018 to February 2019 on Baidu
index
The search frequency of “smart
TV” from February 2018 to
February 2019 on Baidu index
Baidu is the #1 search
engine in China. The
volume of search
(more than ¾ of the
total search made on
Chinese Internet)
exhibits the market
digital trends
2018 Chinese New Year
AWM 2018
A news revealed the smart TV
has security issues
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Baidu Index –
Semantic
analysis (1/2)
The most related keywords to
“smart home” are “ranking of
smart home brands”, “Xiaomi
smart home”, “smart home
websites” and “smart home
control system”.
The most related keywords to
“smart speaker” are “which
smart speaker brand is good”,
“smart audio”, “Xiaodu smart
speaker”, “Xiaomi smart
speaker” and “evaluating
smart speakers in 2018”.
Smart home
Smart home control
system
Xiaomi
Xiaomi smart home
Top 10 smart
home companies
Smart
home
websites
Prospect analysis of
smart home
Pictures of smart
home
Ranking of smart
home brands
Smart speaker
Evaluating smart speakers in 2018
Which smart speaker brand is good
Xiaodu smart
speaker
Smart audio
Xiaomi smart
speaker
Smart speakers
recommendationRanking list of
smart speakers
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Baidu Index –
Semantic
analysis (2/2)
The most related keywords to
“smart appliances” are “smart
home”, “smart light bulbs”,
“smart appliances products”
and “smart fridges”.
The most related keywords to
“smart TV” are “download
smart TV software”, “smart TV
websites”, “The smart TV
forum”, “which smart TV brand
is good” and “smart home”.
Smart
appliances
Smart home
Smart appliances
products
Smart light bulbs
Smart fridges
Website of
smart home
Info of smart
appliances
Smart TV
Smart TV
Development trend
of smart appliances
The smart
TV forum
Download smart
TV software
Smart TV
websites
Which smart
TV brand is
good
Smart home in the future
Smart home
websites
Network TV
Pictures of smart appliances
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Consumer
Questions
On Zhihu and other platforms,
the main questions about smart
speakers consist of the
following:
• What are the strengths and
weaknesses of smart
speakers?
• How to pick good smart
speakers?
• What are the main functions
of smart speakers?
“Comparing different brands” is
the most common way to find
answers for many pertinent
questions.
What are the
advantages and
disadvantages of smart
speakers launched by
domestic and foreign
brands?
If you want the cost-
effective one, pick
TmallGenie during the
Double 11 shopping
carnival. If you want a
smarter one, pick
Xiaomi. If you want
different types of music,
pick DingDong. If you
want to talk to an
intimate sister, pick
Xiaoya.
Are there any cost-
effective smart
speakers?
TmallGenie: as the
product launched by
Alibaba, other than
playing music, shopping
is also the function of
the smart speaker.
Users can ask
TmallGenie to search for
goods and directly pay
after binding Alipay.
Zhihu is the first Q&A website. in China, and
has transitioned to a social media sharing
platform gathering more than 100 million
answers on various topics. The platform is
especially relevant to reach higher-, well-
educated social classes
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Consumers’
positive feedback
On social media (Weibo and WeChat)
positive feedback/ posts about smart
speakers focus on the following aspects:
1. Make life more convenient
2. Effectively control other smart home
devices
3. It’s interesting to talk with smart speakers
When users can’t use their hands, they can reach their
goals by commanding smart speakers through voice
control. For instance, they can control water temperature
and air conditioning by smart speakers when they are
taking a shower, they also can make a phone call with a
smart speaker when they are driving. The highest use of
smart speaker is to free users’ hands and save more time.
By voice interaction, users can directly tell smart
speakers what they want. When you want to listen to
music, you can tell the speaker name of the song and the
smart speaker will play it. When you want to know the
weather, it will tell you the weather for any time and
location. Smart speakers also can be control platforms for
all smart home devices, they can connect to all other
devices and make them more effective.
Wechat is the #1
social media in
China and an
absolute must-have
for a market entry
promotion. It
accounts for over 1
billion active users
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Consumers’
negative feedback
On social media (Weibo and WeChat)
negative feedback/ posts smart speakers
focus on the following aspects:
1. Can’t understand some sentences /
questions
2. Slow response
3. Not many useful functions
By comparing many smart speakers, aside from
appearance, their functions are similar, including playing
music, controlling appliances and searching info. The
users’ experience of smart speakers varies depending on
the situation. They can’t understand your orders correctly
in noisy surroundings. Their reactions are not fast,
dialogues are not great.
Smart speakers currently have obvious limits:
1. Not smart at all. Poor understanding ability, bad
conversation ability. They are more like a search
engine.
2. Bad tonal-recognition capabilities.
3. Simple functions. Many users only use smart
speakers to play music.
Sina Weibo is a
microblogging site
with nearly 400
million monthly users,
and is a well
leveraged platform to
spread marketing
campaign on Chinese
Internet
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Context of
consumption in
China
Based on information from
Weibo and WeChat, Chinese
consumers primarily use smart
speakers in the following ways:
1. Controlling appliances,
such as TV and lamps.
2. Playing music
3. Receiving news, such as
weather, sports and etc.
4. For children: educational
purposes, telling stories,
etc.
This picture is from
a smart home device
ad and shared on
Weibo. The picture
shows a user is
raising his TV’s
voice by a smart
speaker when he is
watching football
with friends.
The picture has been
taken from a user’s
home and shared on
Weibo. In this
picture, his daughter
is talking to a smart
speaker to test its
response.
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Online trends :
consumers’
perception
On Tmall/Taobao and JD, other than good sound quality,
other positive feedback includes simple set-up, easy to
control, low price and fast delivery.
Negative feedback focuses more on slow a response,
poor understanding capabilities, broken/not working and
costly price.
The product is good. I’m happy about buying the smart
speaker with 50 RMB, it is very cost-effective. Its light
has different colours, it looks pretty.
I checked the product, it’s certified. It’s very useful and the
setting is simple, it’s similar to the setup of a cell phone. It
has the nice sound quality, very popular in offices.
As always, the product is very useful. It’s becoming
smarter, its voice is better, its price is reasonable and
its response is accurate
The product is very bad. It has no response whatever I
ask, it can’t do anything, even can’t play music.
The voice control of the smart speaker is not working
well, sometimes, it has no response even when I shout
loudly. It’s unresponsive.
The product is not good, I have to shout loudly to make
it understand my sentences, the so-called AI is useless.
Its sound quality is also bad.
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COMPETITION
ANALYSIS
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Market shares in
China
In September 2018, Tmall, Baidu, Xiaomi and JD were the
leading players in China’s smart speaker market. In total,
they have occupied more than 90% of the market.
Domestic brands have a better understanding of the
Chinese language and their products are cheaper, therefore
they are dominating the market.
Tmall
35%
Baidu
22%
Xiaomi
20%
JD
20%
Others
3%
Market shares of smart speaker brands in China by sales
(September 2018)
Source: 2018 smart speaker market report –Forward
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Competition
analysis: smart
speakers
On Taobao/Tmall, the sales of smart speakers are mostly
from large domestic brands. They are usually big Internet
and e-commerce companies, and they have dominated the
online sales of smart speakers by making full use of
network traffic, lower prices, and Chinese shopping
festivals, such as Double 11 (the largest offline and online
shopping day in China, launched by Taobao).
Brands
International
vs Domestic
Presence on
Tmall/Taobao
and JD
Sales on
Tmall/Taobao in
January 2019
Top seller
price on
Tmall
Price range on
Tmall/Taobao
(RMB)
TmallGenie
(天猫精灵)
Domestic Not on JD 934,351 items 229 RMB 39 to 3,930
Baidu
(百度)
Domestic Yes 52,582 items 399 RMB 44.5 to 3,224
Apple
(苹果)
International Yes 218 items 148 RMB 99 to 2,799
Harman
Kardon
(哈曼卡顿)
International Yes 100 items 1,098 RMB 680 to 5,748
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Competition
analysis: cleaning
robots
The sales of domestic brands are much higher than
international brands on Taobao/Tmall. Even though some
domestic brands are more expensive than international
brands.
Large domestic brands have developed advanced
technologies (such as RLG Navigation System) that can
perfectly fit consumers’ needs for cleaning robots.
Brands
International
vs Domestic
Presence on
Tmall/Taobao
and JD
Sales on
Tmall/Taobao in
January 2019
Top seller
price on
Tmall
Price range on
Tmall/Taobao
(RMB)
ECOVACS
(科沃斯)
Domestic Yes 78,476 items 1,899 RMB 899 to 14,999
Mijia
(米家)
Domestic Yes 22,579 items 1,599 RMB 39 to 1,749
PHILIPS
(飞利浦)
International Yes 1,115 items 999 RMB 390 to 3,798
Klinsmann
(克林斯曼)
International Yes 6,144 items 1,098 RMB 399 to 1,098
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E-commerce
landscape of smart
speakers
The price range of smart
speakers is quite large on
Tmall.
Popular products usually have
good quality, which means the
sales are not driven by price,
and consumers hold product
quality to be of
Most expensive SKU Cheapest SKU
Top seller SKU
•TmallGenie
•229 RMB
Top selling
SKU
•49 RMB
•2,799 RMB
Price range of
the category
•1.198
•Market is not driven by price
Ratio top
selling price vs
average price
•191.1 RMBAverage price
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Business cases – Baidu (百度)
Digital activity
Baidu only started to launch
smart home devices in 2018, but
its sales have been growing fast.
In Baidu’s website, different
types of smart speakers and
important activities are the main
content.
Due to great quality at lower
price, Baidu’s smart speakers
quickly received much attention
from Chinese consumers.
Recently, in order to increase its
sales, the brand released new
arrivals in China, such as smart
speakers with screens.
https://dumall.baidu.com/
Platform Presence
Official
account
Volume (sales, product
reviews or traffic)
Dumall.baidu.
com
Yes Yes 586,861 visits per month
Tmall Yes Yes 56,862 items in January 2019
JD.com Yes Yes More than 500,000 comments
Kaola No No The brand is not selling on Kaola
Pinduoduo Yes Yes Daily sales are 0
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Business cases – Baidu (百
度)
E-reputation in China
The most related keywords to
“Xiaodu smart speaker” are
“Xiaodu smart speaker app”,
“Xiaodu smart speaker
instructions”, “connecting
Xiaodu smart speaker with
computers” and “Xiaomi”.
On Weibo and WeChat, Baidu
usually releases advertising
videos, new arrivals / functions
introductions, important events
and discount activities.
Copy the screenshot of Baidu “related keyword” mapping for the
brand name
Platform Presence Followers
Posting
frequency in
January 2019
Wechat Yes 12,085 10 posts
Weibo Yes 19,954 45 posts
Xiaodu smart speaker
Xiaodu smart speaker app
Xiaoai smart speakerXiaomi
Xiaodu smart speaker
instructions
Connecting Xiaodu smart
speaker with computer
Xiaodu smart speaker
and TmallGenie
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Baidu (百度) smart
speaker case
study
Baidu first released its smart speaker in 2018
The brand is focused on smart speakers, it also has other
smart home devices but a limited number
Online is the main sales channel for Baidu, however, it
started to build offline stores with other smart home
brands.
Baidu has been one of the leading brands with the fastest
growth in China’s smart home devices market.
Baidu is focused on cheap smart
speakers, its products have good
sound quality, multiple functions and
rich music variety. In 2018, Baidu
launched China’s first smart speaker
with a screen.
Chinese consumers view Baidu’s smart
speakers as cost-effective. The good
sound quality and rich music resources
are favored by many users.
In order to have more market shares,
the brand is selling smart speakers at a
loss and its other smart home devices
are also cheap.
Baidu used a famous spokesperson
from Taiwan Kevin Tsai (蔡康永) as the
host of its smart speaker. Also, the
brand is working with Haier (海尔) to
make its smart speakers control smart
appliances.
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Business cases – TmallGenie(天猫精
灵)
Digital activity
The official website of
TmallGenie mainly provides
info about different types of
smart speakers, main
functions and other smart
home devices can be
controlled by smart speakers.
By working with large
appliance brands (such as
Midea and OPPLE),
TmallGenie successfully
expanded the application of its
products and attracted more
consumers.
https://bot.tmall.com/#1
Platform Presence
Official
account
Volume (sales, product
reviews or traffic)
Bot.tmall.com Yes Yes 251,611 visits per month
Tmall Yes Yes 934,351 items in January 2019
JD.com No No The brand is not selling on JD
Kaola No No The brand is not selling on Kaola
Pinduoduo Yes Yes 120 items per day
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Business cases – TmallGenie(天猫精灵)
E-reputation in China
The most related keywords to
“TmallGenie” are “TmallGenie
Fangtang”, “difference
between TmallGenie X1 and
Fangtang” and “which one is
better between TmallGenie
and Xiaomi”.
On Weibo and WeChat, the
brand usually releases
advertising videos, new
arrivals / functions
introductions, important events
and discount activities.
Platform Presence Followers
Posting
frequency in
January 2019
Wechat Yes 447,645 20 posts
Weibo Yes 961,785 92 posts
TmallGenie
Which one is better between
TmallGenie and Xiaomi
TmallGenie
Fangtang
How to use
TmallGenie
Difference between
TmallGenie X1 and Fangtang
Comparing TmallGenie X1 with Xiaodu
TmallGenie App
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TmallGenie (天猫精
灵) case study
TmallGenie smart speaker was launched in 2017
Currently, TmallGenie smart speakers are mostly sold
online, it only has 1 offline store in Hangzhou
Most kinds of smart speakers can be used as control
centers for appliances
TmallGenie is targeting all age groups.
TmallGenie frequently releases new
arrivals such as mini smart speakers
for children, and events, such as
shopping events, to attract more
consumers of different ages.
Chinese consumers view TmallGenie
as a smart speaker brand that provides
multi-function products.
TmallGenie decreased its price by
different discount activities during
some famous shopping days, such as
Double 11 shopping carnival. This
strategy quickly increased its sales.
In order to expand sales channels,
TmallGenie is working with many big
appliances brands to make its smart
speakers be the control centers of
more smart home devices.
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Comparing online
interest for leading
brands
On Baidu index, TmallGenie showed the highest search
frequency and Mijia (Xiaomi) had the second highest
search index during the past year. Xiaodu (Baidu)’s
search frequency was significantly high in June 2018,
when its smart speaker was officially released in China.
On WeChat index, TmallGenie showed the highest
search frequency and Tencent had the lowest search
index during the past 90 days.
The search brands are
Xiaodu (Baidu)
TmallGenie
Mijia (Xiaomi)
Dingdong
Tencent Tingting
The search brands are
Xiaodu
TmallGenie
Xiaomi
Tencent Tingting
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Xiaodu (Baidu)
advertising case study
This video ad mainly highlights
the smart speaker’s various
functions that can effectively
create more convenient lives
for users.
Another feature is voice
control, users can easily
control smart speakers by
asking questions and directly
giving orders, even kids can
independently use it.
Besides, the video also
implies the targeting of young
consumers and people who
have children.
https://v.youku.com/v_show/id_XMzc3MTIwOTczMg==.ht
ml?spm=a2h0k.11417342.soresults.dtitle
The advertising video highlights different functions of Baidu smart speakers by several
scenes and users. 1. local weather 2.music 3. simple math 4. simplescientific
knowledge 5. radio broadcast 6. alarm clock
The video impliesthe Xiaodu smart speaker can perfectly meet users’ demands of
entertainment and studying on a daily basis.
Only for the audience in
China
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Brand naming –
case studies
Chinese names of smart
speakers usually include two
features:
1. Easy to remember related
to the name of the
respective brand
2. Highlighting the product is
smart and easy to use
The names of smart speakers
are very important, good
names can offer a friendly
feeling to users and drive
consumers to talk with them.
• “小” means small, “度” means Baidu, “在家”
means at home.
• The name implies the smart speaker is
launched by Baidu and used at home.
小度在家
(Xiaodu,Baidu)
• “天猫” means Tmall, “精灵” means genie.
• The name implies the smart speaker is as
smart and cute as an elf. Also, it highlights
the smart speaker is released by Tmall.
天猫精灵
(TmallGenie,
Tmall)
Justification
/ reason /
detail #1
• “叮咚” is the Chinese description of the
sound of the doorbell.
• The name implies the smart speaker has
good sound quality and have a quick
response to users’ orders.
叮咚
(Dingdong,
JD)
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DISTRIBUTION&
PROMOTION
ANALYSIS
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Online retail:
Coverage in China
The number of smart speakers,
exhaust fan and TV brands on
JD is far more than
Tmall/Taobao, mainly due to the
higher requirements and
investments from Tmall for those
brands want to enter the
platform.
However, the number of cleaning
robots and smart fridges
(especially fridges) on
Tmall/Taobao are more than JD,
a possible reason is that JD is
focusing on its own smart fridge
brand.
Market
segments
Number of
brands selling on
Tmall/Taobao
Number of
brands selling
on JD
Smart speakers 197 353
Smart cleaning
robots
171 145
Smart fridges 142 54
Smart
exhaust fan
198 382
Smart TV 42 117
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Offline retail:
Coverage in
Shanghai
The main offline sales channels for smart home devices
are brands stores and large appliances stores (such as
Suning and Midea Electric) in Shanghai. Smart speakers
are mainly sold in brand stores.
Baidu Map: 1,103 results Dianping: 35
Store
chains
Number of
stores in
Shanghai
Xiaomi
smart home
35
SAMSUNG
smart home
21
Huawei
smart home
17
Large
appliances
stores
7,028
Smart speakers
Xiaomi smart home
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On-the-shelf:
representation of the
category in stores
Chinese consumers usually
buy smart home devices and
speakers from big shopping
malls (specialized electrical
appliances) and brands
stores.
In those offline stores, smart
speakers are usually placed
on individual shelves and have
obvious distance with other
products. Many brands stores
only display 1 to 2 types of
smart speakers.
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Online sales:
volume assessment
E-commerce platforms are significant distribution
channels for smart home devices, especially smart
speakers, because some leading brands, like TmallGenie
and Baidu, mostly sell their products online.
According to the sales on Taobao/Tmall, smart speakers
are the most popular smart home devices among
Chinese consumers.
Way of ranking: general, popularity, new arrivals,
sales and price
Smart speakers
Main brands 1.22
0.20 0.17
Smart speakers Cleaning robots Smart exhaust fan
Sold items of smart home devices on Taobao/Tmall
(million–January 2019)
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Promotion channels to
leverage for international
brands in China
Dedicated Websites/Apps:
Suning smart living (苏宁智
能)/ Suning smart living app
JD smart (京东智能)/ JD smart
app
Smart.gome.com (国美智能)/
Smart.gome.com app
Zhipin Mall (智品商城)/ Zhipin
Mall app
Specialized Magazines:
Smart Home (智能家居)
China Appliance Technology (
家电科技)
Artificial intelligence View (人
工智能)
Suning smart living
(苏宁智能) is a
Chinese shopping
website specialized
in smart home
devices, mainly
selling smart
speakers and
appliances.
Smart Home (智能
家居) is a Chinese
magazine
specialized in
smart home
industry. It
provides info about
the smart home
technologies and
devices (including
smart speakers) in
China.
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KOL landscape in
China
For international smart home
brands, Chinese KOLs are a
huge part of modern Chinese
product promotions and local
consumers are influenced by
KOL’s shared introductions and
opinions.
KOLs, who frequently post info
about smart home devices, are
smart home brands’ managers /
CEO, electronics KOLs,
technology KOLs and writers
This is the Weibo
account of a digital
electronics KOL.
He has 461,682
followers. He often
posts advertising
videos and info
about smart home
devices and smart
speakers. One of
his posts about
Baidu smart
speaker has 153
likes and 380
shares.
This is the Weibo
account of a well-
known network
KOL and writer. He
has 435,613
followers. He
published many
articles about
China’s smart
home devices and
speakers market.
He also posted
many news about
smart speakers
brands.
The Key Opinion Leader (KOL), or influencers, are a
major part of the Chinese online journey, and therefore
of the online marketing funnels for international brands in
China. KOL will especially be as relevant to target niche
audience (micro-KOL) and mainstream consumers
(mass-market)
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MARKET
TREND
ANALYSIS
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MARKETTRENDS
Sound quality is one of the most important factors that affect users
experience. Many brands are trying to improve the sound quality of their smart
speakers.
Having a better understanding of users’ orders and questions is the key to
attract consumers’ favor. Making smart speakers understand complex
sentences and have faster responses is another mission for many brands.
Smart speakers with screens can develop more ways of use (such as video
calls and shopping) that make consumers use smart speakers more frequently.
I.
II.
III.
Better sound quality
Smarter
Smart speakers with screens
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