As the saying goes, “the one who beats you may not be the opponent, and the one who subverts you may not be the peer”. Under the influence of this year’s epidemic, this sentence has been verified again.
The outbreak of the new crown has a significant impact on China’s overall economy, and many industries are facing survival problems under the epidemic situation. Service industry, physical retail, tourism and labor-intensive industries are regarded as the “economic” disaster areas of the epidemic.
Novel coronavirus pneumonia has been released by IDC recently. The domestic terminal market will usher in a series of changes. The forecast for China’s terminal market this year is rather unoptimistic. As a “different kind” of terminal hardware, can the smart speaker, which has been extremely popular in the past two years, survive the epidemic?
Under the “epidemic” of the war, what are the variables of the smart speaker Market?
IDC believes that under the influence of the general environment, the negative impact on the sales volume of the national terminal market is inevitable. The overall sales volume of China’s terminal market will decline in the first quarter, and it is expected to exceed 30% – 40%, but there will be a U-shaped rebound in the later period. IDC judged that, based on the supply chain, production, logistics constraints, major changes in sales channels and other aspects, if the epidemic can be effectively controlled in early March, the annual terminal market will decline by 7-10%.
If this set of forecasts come true, it will have a very serious impact on many domestic terminal markets, such as PC and tablet products, which have been in the downward trend in recent years, and this year will undoubtedly be more difficult. Smart speaker is one of the few terminal products to rise against the trend in recent years. What is the impact of the epidemic on it?
According to the data of “China’s smart speaker market summary report 2019” released by AVC, the sales volume of China’s smart speaker Market in 2019 was 36.822 million units, with a year-on-year growth of 126.6%, and the sales volume was 6.91 billion yuan, with a year-on-year growth of 89.3%. This is the third consecutive year since 2016 that the industry has achieved explosive growth.
Specific to each brand, tmall spirit, Baidu and Xiaomi have a total share of 92.7%, and tmall spirit remains the first in the market.
From the above data, we can see that the market concentration of China’s smart speaker industry is very high. It is no exaggeration to say that the current smart speaker industry, including the upstream supply chain enterprises, is being led by tmall spirit, Baidu and Xiaomi, which have a great influence on the industry.
According to the supply chain, at present, only 30% – 50% of the employees return to work in tmall spirit, Baidu and Xiaomi related core factories, and less than 30% of the employees return to work in upstream material suppliers. Affected by the epidemic, the overall capacity of smart speakers in all factories will be less than 200000 by the end of February, and perhaps the industrial situation will ease in March.
In this case, the result is that the supply capacity of the industry will be limited to a certain extent. If the product inventory is insufficient, it will even cause a shortage of market supply, which will affect the annual sales.
However, according to the sales situation of smart speaker Market in January 2020, the relevant situation has not happened. AVC data shows that the sales volume of smart speakers in the domestic market is 4.18 million, and tmall Genie ranks first with 1.46 million.
The comparison shows that compared with January 2019, the sales volume of smart speakers is still rising. Of course, the increase is bound to decline, but it is not caused by insufficient production and supply of the industry. Take tmall Genie as an example, as of February 26, its related promotion activities continued on all major platforms, indicating that the current inventory is still sufficient, at least there is no inventory pressure in a short period of time.
The reason for the decline of sales growth in the first quarter may be more from the limited logistics. However, with the gradual recovery of the logistics system at this stage, the second quarter is expected to continue to usher in rapid growth.
On the whole, the biggest impact of the epidemic on the smart speaker industry should still lie in the “production link”, which is less than that of other industries. Of course, it depends on the final duration of the epidemic and the resumption of work. To be sure, IDC predicts that the terminal market will decline by 7-10% in the whole year, which will not be reflected in smart speakers.
Only by grasping the three advantages can we remain invincible
The impact of the epidemic on the smart speaker industry is small on the one hand, but the so-called “ironmaking needs its own hard” industry brands can continue to lead after the epidemic still need to have three characteristics.
1. Channel will influence the market again
IDC predicts that in the terminal market, traditional stores will usher in a new wave of store closures, and the sales proportion of e-commerce platform will increase. In recent years, the offline stores are difficult to operate, and now they are unable to operate, which will inevitably affect the capital chain and revenue of the stores.
This is true for other categories of terminal products, especially some large and high price products, which will be greatly affected by the channel, but not so much for the intelligent speaker industry as a whole.
Take tmall Genie as an example. At present, the proportion of online sales of tmall Genie has already exceeded 70% of the whole, and the proportion of online sales of other brands is also higher and higher. However, in this special period, channels have different meanings for various brands in the industry.
In this period, online channel will become the shopping choice of most people, even the only choice. The previous set of online and offline multi-point flowering mode was obviously temporarily pressed the pause button.
Due to the support of tmall Taobao, it is inevitable that the so-called “fat water does not flow to other people’s fields” flow will be tilted. The advantages of tmall spirit will be highlighted. It has advantages in channels, which means that it can also ship goods normally during the epidemic period, and can further reduce the impact of the epidemic.
The era of “channel is king” is coming back again under the influence of epidemic situation. The channel will play an important role in the competition among brands in the intelligent speaker industry.
2. Hardware business has to return to content
At present, all kinds of hardware products, including smart speakers, homogenization is a common problem. So if you want to reduce the impact during or after the epidemic, product substitutability is a key point.
For smart speaker products, it is of little significance to make an article in terms of appearance and technology, unless there is a qualitative change like a screen speaker.
For example, Wang Kai, the storytelling CEO of kaishu, once shared the case of his storytelling machine. Through research, it was found that when children choose storytelling machines, they don’t care about appearance or quantity, but whether they have stories he likes.
This case shows two problems. First, intelligent hardware is not selling hardware, but selling content; Second, it’s not you who decide what to sell, it’s the users who decide.
Content is the best way to reflect the direction of product differentiation. The same is true for smart speakers. For example, what is the household demand during the epidemic? What ordinary people need is information related to the epidemic situation; What do parents need? In the case of school suspension, children have a place to study; What are the needs of families in short supply? Of course, the relevant purchasing information and so on.
It is this differentiation orientation that makes every brand make a lot of articles on the content level during the epidemic period. It can be seen that tmall spirit, Baidu and Xiaomi all launch content to meet the needs of the epidemic. For example, tmall spirit integrates epidemic news, smart classroom, epidemic prevention guide, psychological epidemic prevention and other comprehensive content into its products with screen, Provide differentiated content for users at different levels in real time.
On the other hand, it is precisely because it can meet the needs of different groups of people that tmall can lead the market.
3. “Ecosphere” determines market ownership
The “ecosystem” includes two aspects: one is the supply chain, which will be greatly affected by the epidemic situation; The other is product ecology. Because people spend a lot of time at home during the epidemic, the “playability” of smart speakers has become the focus of discussion among people at home.
The former has little difference among the major brands, and can not be controlled because of non-human factors; The latter is that the major brands have their own characteristics.
Baidu, for example, relies on its powerful search, enriching search content and information flow to enhance “playability”. Tmall Genie and Xiaomi are similar in that they increase “playability” by expanding ecology. However, there are differences between tmall Genie and Xiaomi. Xiaomi is doing more internal ecological expansion, while Tianmao genie is an external ecological extension.
For example, as early as last September, tmall Genie has cooperated with more than 900 intelligent hardware and home appliance manufacturers, enabling users to have the ability to override most of the home appliance products through intelligent speakers, enriching the “playability”. The three modes have their own advantages and disadvantages, but there is no doubt that tmall spirit is the most future oriented mode.
Mastering the channel, content and ecology will play a decisive role in the outbreak of smart speakers after the epidemic.
Can smart speaker become a special case of terminal market?
Can smart speaker become a special case of terminal market? From the market feedback in January, there is no problem, mainly due to two aspects.
1. The pace of smart family will not stop
Unlike other types of hardware products, smart speakers have a “big background” to support, that is, home IOT scene. The rise of smart home market will not slow down due to epidemic related reasons, and may even promote the market growth of related products.
Under the influence of the epidemic, people have returned to the “family”, and the use frequency of household appliances has been greatly improved. Intelligent speaker products are naturally favored by the market because they are both terminals and hubs.
As a brand in the industry, it will not reduce the investment in smart speaker products due to the epidemic. It can be seen that whether Baidu’s content expansion, Xiaomi’s “1 + 4 + X” strategy, or Ali’s building tmall Genie into a “chess eye” for home consumption IOT, all these show the importance of smart speakers in major brand strategies.
In addition to the official implementation of 5g network and the competition of various home IOT products, the importance of intelligent speakers as control terminals becomes more and more prominent. Even if the epidemic can not be ended in a short time, causing the actual inventory problem to the brand, the gap will be made up in the future market.
2. The power point of smart speaker has not come yet
As can be seen from Ovi cloud’s 2019 intelligent sales data and previous years’ data, the beginning of each year is not the driving point of the intelligent speaker market, and the corresponding second half of the year and e-commerce promotion festivals such as 6.18, double 11 and double 12 are the breaking point.
On the one hand, it is still a long time away from these nodes, and the supply pressure affected by the epidemic in the first half of the year will be relieved by then; On the other hand, online activities are less affected by the epidemic, so it can be said that they have no impact when the logistics is smooth.
Besides, there are many voices about “retaliatory” consumption in the market at present. After being “closed” at home for a long time, they are full of expectations for delicious, delicious and fun things.
Through various platforms such as short videos, there are a lot of contents about smart speakers. For example, the popular Q & a game of tmall elves guessing characters recently has aroused the appetite of the audience without tmall elves. If the sales volume of tmall elves achieves a large-scale growth in February and continues to lead the market, it will not be surprising. I’m afraid to thank the first user who sends videos.
In a word, driven by the market and industry, smart speakers can not only survive, but also survive.
Smart speaker products will continue to “go their own way” and become a special case in the terminal market. If you want to delay the continuous outbreak of the smart speaker market, the epidemic situation has no such ability.