Smart speakers, other AI-enabled devices poised to become the Next Big Thing in China

China, already the world’s biggest smartphone and internet market, appears set to become a major consumer of a range of gadgets enabled with artificial intelligence (AI), including voice-activated smart speakers and robots for the home, according to a new study.

Interest in such AI devices was found to be the strongest among consumers in emerging economies Brazil and China, according to this year’s Global Consumer Insights survey by professional services company PwC.

It found Brazilian and Chinese consumers were twice as likely to plan buying an AI device – 59 per cent and 52 per cent, respectively – as their American, British or French peers, with interest at 25 per cent, 24 per cent and 25 per cent, respectively.

The annual survey, which assesses the shopping behaviour, habits and expectations of more than 22,000 consumers in 27 countries, found that 21 per cent of respondents in China already owned AI-enabled devices, such as the automated personal assistants that come in the form of smart speakers.

Across all markets surveyed, early adopters of AI devices tend to be men, aged 18-34, according to PwC.

“AI is moving very rapidly into the consumer and retail sectors,” John Maxwell, the global consumer markets leader at PwC, said in a statement. “Within two to three years, AI could revolutionise how companies profile, segment and serve customers.”

Will 2018 be the year of the smart speaker in China?

The survey results also appear to bolster how Chinese consumers, who have taken to e-commerce in increasing numbers each year, are keen to adopt the latest innovation for the home amid the country’s efforts in AI.

The Chinese government has made AI a top priority, pledging to build a US$150 billion industry by 2030. Beijing has also recruited the country’s biggest technology companies – including Baidu, Alibaba Group Holding and Tencent Holdings – to join a so-called national team to push the domestic AI industry forward.

In January this year, Baidu, Alibaba and Tencent-backed took the wraps off their latest smart speakers in Las Vegas at the CES trade show, the world’s biggest annual consumer technology event.

Smart speakers are often advertised as voice-activated virtual assistants for the home that can help users hail a ride, order pizza, provide weather updates and even order a gift online.

For the major Chinese internet companies, smart speakers not only help gather data for things like user preferences and speech patterns, it also ensures that users stay within their ecosystem of services – especially useful to e-commerce service providers like and Alibaba, which owns the South China Morning Post.

While sales of smart speakers have grown fast in the United States, demand in China has the potential of growing more rapidly on the back of the major internet companies’ ecosystem of services and as the nation’s online population further expands.

China had more than 772 million online users at the end of last year. That internet population was bigger than those in India and the US combined – yet China’s internet penetration rate of 55.8 per cent is among the lowest among G20 countries. Internet penetration rates in Japan, Britain and South Korea all exceed 90 per cent.

Start-ups involved in smart speakers see China surpassing the US, which currently leads AI research and development worldwide, in the nascent market for AI-enabled gadgets.

“None of the big-name Western smart speakers, such as Amazon’s Echo, Google Home and Apple’s HomePod, have officially entered China,” said Zhu Yuanzhi, marketing director at Rokid, a Hangzhou-based smart speaker start-up backed by investors including Temasek Holdings and Credit Suisse.

Zhu said the main reason for that delay was that it was “difficult for their AI [systems] to master the Chinese language and interact with Chinese consumers”.

Alibaba expands its smart speakers beyond the home as it takes on Amazon Echo

“This provides us a great opportunity to leapfrog these tech giants in this AI device market,” he said.

Nasdaq-listed was an early player in the domestic market for smart speakers with its LingLong DingDong, a device launched in 2016 by its joint venture with Shenzhen-traded speech-recognition software specialist iFlytek.

Li Zhifei, chief executive at Mobvoi, a Chinese start-up that makes a line of voice-activated smart home devices, attributed rising domestic demand for AI devices to strong public and private sector support in promoting AI.

“With more consumers embracing AI devices, more companies and investments will enter this new market,” Li said.

Within two to three years, AI could revolutionise how companies profile, segment and serve customers

John Maxwell, global consumer markets leader at PwC

More than 100 companies in China have become involved in the smart speaker market since last year, betting that these devices would be the next big thing after smartphones.

Other companies have looked into AI-enabled smart appliances, covering television and white goods like refrigerators, as well as companion robots for the elderly.

Foreign-brand smart home speaker systems may also be subjected to increased government scrutiny and regulatory hurdles to protect personal data of mainland consumers, allowing Chinese brands to grow their user base, according to Neil Shah, a research director at Counterpoint.

“Out of close to half a billion households in China, at least 150 million households – based on affluence and high annual income – could potentially make up the total addressable market for smart speakers in the country,” Shah said.

Leave a Reply

Your email address will not be published. Required fields are marked *