Alibaba flexes e-commerce muscles with smart speaker move

Alibaba Group’s hefty investment in smart speaker technology will cement its leadership position in China's e-commerce market, says GlobalData.

The company will stump up US$1.4 billion to develop an artificial intelligence and Internet of Things ecosystem that supports its smart speaker, the Tmall Genie, which launched in 2017.

In 2019, Alibaba shipped 16.8 million smart speakers to consumers, while rival Baidu shipped 17.3 million, according to Canalys.

“The mass subsidisation of smart speakers by China's tech giants has driven high levels of adoption. It has also begun to shift customer habits towards purchasing products or services via a conversational assistant,” says Oliver Lockett, Thematic Analyst at GlobalData.

“Alibaba’s decision to more closely integrate the proprietary AI and IoT technologies of its Tmall Genie smart speakers with the company's e-commerce ecosystem puts the conglomerate at the forefront of this technological shift.”

The company has invested heavily in AI and IoT over the last few years. Even before this announcement, Alibaba ranked top on the thematic screen of GlobalData's E-commerce Sector Scorecard.

“The latest investment will help consolidate this position by enabling the company to collect more information about its customers, which will then be used to improve content and product recommendations,” Lockett comments.

“Greater personalisation should drive sales from Alibaba's extensive range of products and services across areas like entertainment, education, healthcare and online shopping.”