In 2020, the smart speaker battlefield is entering a post subsidy era. Do you want a subsidy? Will competitors subsidize? How can subsidies be more efficient? This is all a problem.
Smart speaker battlefield is full of treacherous atmosphere. The past experiences of various enterprises are different, and their own advantages are also very different. How to go next, the Eight Immortals crossing the sea show their magic power.
1、 Another kind of subsidy
In the article “smart speakers past the early maturity period”, I mentioned the view of “stopping market subsidies” – the reason is very simple. After the exploration period is over, other players are shuffled, and there are only three real big players in the market: Ali, Baidu and Xiaomi – they occupy 90% of the market share.
However, “stop” more represents the good will of practitioners. “Shout” does not mean that it will really pause completely.
According to insiders, a smart speaker giant reported internally that it played a game between continuing subsidies and reducing subsidies, but ultimately did not make a decision, and most people tended to continue subsidies.
The question of whether to subsidize or not seems to have become a “luoshengmen” in the public reports of the media and the mouth of practitioners – this luoshengmen reflects some tangled emotions in the current smart speaker market.
We might as well sort out the words related to subsidies or no subsidies of various enterprises.
The “stop” voice of the subsidy war appeared for the first time, probably in July 2019. At that time, Jing Kun, vice president of Baidu, loosened the tone of “smart speaker subsidy does not stop schedule” in May and changed it to “hardware subsidy will not last”.
Also in July, according to the report of “Shenxiang”, Ali suspended market subsidies and decided to “build a high wall, accumulate grain widely and slowly become the king” and turn around for industrial upgrading.
In August, geek Park reported that Xiaomi Xiaoai speaker took the initiative to reduce the price when the price war was the most intense. Xiaoai mini speaker with a price of 169 yuan was tied to tmall elf with a price of 99 yuan. At that time, the person in charge found it in time and called an emergency stop.
In December 2019, when 36 krypton interviewed Jing Kun, vice president of Baidu, Jing Kun explained the reasons why baidu reduced subsidies for smart speakers:
It is a healthy model for me to level subsidies and pricing.
Whether subsidies or not, they all have their own reasons. Subsidies continue in the cold winter, and enterprises have a big head.
Rationally speaking, it really should stop, which is everyone’s wish.
Starting from the facts, you will find that the problem is more complex than you think – it’s like the nuclear warhead race in the cold war between the United States and the Soviet Union. You can’t stop it if you want.
1. Market inertia. In many cases, good intentions cannot control the market will, let alone the competitors’ will. Every enterprise is watching the actions of its competitors. If the competitors subsidize, they have to follow up based on game considerations;
2. Market level. You can’t dig a well in half. The use scenarios of smart speakers in the first and second tier cities and the fourth and fifth tier cities are different. The first stage of blindfolded throwing money has passed, and the market segments must continue to be differentiated and cultivated;
The smart speaker battlefield in 2020 may have to continue to subsidize for another year – but the subsidy needs brains and ingenuity. For example, Ali and the local government set up a “spirit subsidy” to specially subsidize the home appliance enterprises cooperating with tmall spirit to reduce the software and hardware costs in the process of enterprise upgrading.
This means that Alibaba tmall elf has two more advantages than its competitors.
1. Policy endorsement; The linkage relationship between local governments and local manufacturing enterprises is easy to drive the industrial scale, reduce product costs, and pave the way for the deep landing of smart speakers in third, fourth and fifth tier cities;
2. Manufacturing blessing; In some industrial belts, traditional manufacturing small household appliances hope to seek product innovation and jointly customize “smart products” with tmall elf in an attempt to boost sales, so tmall elf sinks accordingly;
Smart speakers are not only trendy consumer electronics, but also mass consumer electronics.
When making trendy consumer electronics products, it is easy to be sunny and snowy. Limited to the first and second tier cities, it can not really sink. It can only rely on market subsidies to penetrate the third, fourth and fifth tier cities for a long time.
To make mass consumer electronic products, we need to have the determination to “sink down”. Some “local methods” that don’t look so tall are direct and effective.
What Ali tmall elves are doing now is trying “local methods”.
2、 Game in start-up period
In the global smart speaker data report for the third quarter of 2019 released by canalys, the global shipments of smart speakers were 28.6 million, a year-on-year increase of 44.9%. Ali ranks second in the world and first in China with 3.9 million units. Baidu (3.7 million units), Google (3.5 million units) and Xiaomi (3.4 million units) ranked third to fifth in the world.
In the third quarter data report of canalys and strategy analytics, there were differences in shipments and market rankings of Baidu and Alibaba. The two data companies ranked the two enterprises first in the Chinese market.
International authoritative research companies have different information collection methods and different research and analysis methods. This phenomenon often occurred in the mobile phone industry in the past. In fact, there is no need to make a fuss. The differences in this data survey reflect the following problems:
Ali and Baidu are fighting hand to hand on the smart speaker battlefield, forming a tangled pattern, and the competition is becoming more and more fierce.
According to the trend prediction of application maturity (AMC) model, the game of Alibaba, Baidu and Xiaomi will enter the start-up stage.
In fact, this model mainly describes the maturity of industrial development through the recognition of products / applications in the market. The measurement indicators include: user use intention / attention, user / advertiser payment intention and investor investment intention.
In the start-up period, enterprises also need to further educate the market.
1. Market scale: the scale advantage of the hardware market often brings cumulative effect. The sales of hundreds of thousands of units in each quarter are ahead. At present, there may be little difference. But in the long run, it will pull out the gap of millions of units next year. At present, the annual shipments of Alibaba and Baidu in the smart speaker market are more than 10 million.
2. Technology accumulation: chip technology and voice interaction technology are one of the important technologies that determine the user experience. Taking chip technology as an example, it basically determines a series of experience functions of the product, such as sound source positioning, sound source enhancement, echo cancellation, noise suppression and so on. Tmall genie’s strength lies in the chip cooperation with MediaTek and its own flat head chip.
3. Industrial linkage: smart speaker is not a self entertainment product after all. It needs to show its ecological value by connecting IOT ecology in series.
The aiot ecosystem built by tmall elf has cooperated with more than 900 home appliance brands, covering all aspects of smart appliances, and can connect more than 235 million smart devices. For these devices, one sentence control can be basically realized. At present, this industrial scale is second to none in the industry.
4. Scene construction: at present, the use scene of intelligent speakers is relatively single. At present, most intelligent speakers can only complete simple functions such as listening to music and setting alarm clock.
In a conversation with the product manager of a smart speaker giant two years ago, it was mentioned that the shopping scene could not be built because the “multi-layer dialogue” was difficult to get through the semantic logic. However, in this year’s double 11, nearly 5 million people tried to use tmall elf for voice shopping.
Through voice purchase, 810000 eggs and 140 tons of rice entered the family. Behind the voice purchase is the payment level voiceprint recognition technology. In China, tmall genie is the only intelligent speaker that supports this technology.
Frankly speaking, there is still a certain gap between the Chinese market and the American market. In 2019, 31 million people will shop through smart speakers. Jaimie Chung, senior forecast analyst at emarketer, mentioned:
This year, 31 million people in the United States will shop through smart speakers, an increase of 31.6% over 2018. (shopping includes browsing, researching products and adding items to the shopping cart.) by 2021, this number will rise to 38 million – 40% of smart speaker users will use shopping function.
It is worth noting that Ali is still paying more attention to the battlefield of intelligent speakers. On the first day of the new year, Alibaba announced that it would upgrade the tmall elf business of the artificial intelligence laboratory to an independent business department, which is in the charge of Ku Wei, head of Alibaba cloud IOT.
In Ali’s organizational culture, it was HEMA that last became an independent business division.
HEMA carries the task of Ali’s new retail model, while tmall elf carries Ali’s aiot strategy this time. The actions of tmall elf in the next 1-2 years deserve attention. Tmall elf is likely to undertake the model task of Ali aiot landing smart home.
3、 Enterprise’s stamina
China’s smart speaker market is large enough to accommodate 2-3 brands in this market, but how far the brand can go depends on the stamina of the enterprise.
In the past, it was often seen in the mass consumer electronics market that enterprises occupied a temporary advantage through short-term market subsidies. However, in the long run, subsidies must be unsustainable.
After all, platform level enterprises should integrate upstream and downstream technology solution providers to find scenarios, resources and users with upstream and downstream enterprises in the ecological chain.
You should know that there are 500 hardware or technology solution providers related to a smart speaker alone.
Currently, Ali, Baidu and Xiaomi seem to have little difference in the market share of smart speaker battlefield, but the trend change of market share has emerged.
Some first mover enterprises gradually find it difficult to join the subsidy war because their profits are too low. Now the enterprises that are really participating in the subsidy war also insist. In the second half of the marathon, if the enterprise’s stamina is tested, Ali is undoubtedly the strongest.
Alibaba Group’s emphasis on the smart speaker battlefield, Alibaba’s e-commerce business’s support for smart speakers, and Alibaba’s ability to build multiple scenarios formed by the digital economy can not be ignored – at this year’s yunqi conference, after three years of preparation, Alibaba cloud has the ability to deliver full link aiot infrastructure.
Intelligent voice interaction technology is only a point, but the future interaction scene is likely to be face-to-face integration. From the overall situation of aiot, smart speakers are even just a temporary stop.
In a report entitled How do smart speakers stack up against visual based retail technology? In August this year, emarketer expressed doubts about the value of smart speakers in the e-commerce market.
It is obviously not enough to focus on the smart speaker. From the longer-term market prospect, the integration of voice, vision and other different interaction modes is probably the norm.