Western vs Chinese voice assistants, who will have the last word?

With digital assistants deemed as the new frontier, the battle is heating up between tech giants globally as they develop platforms to pull users deeper into their ecosystems.

It should come as no surprise that China’s home assistant market is already saturated with speakers from some of the biggest tech companies who are working with some of the region’s biggest brands. Xiaomi is one of the more recent big names to launch a product in market, joining the likes of Alibaba, Baidu, and JD.com. With these four key players already battling it out in China, it raises the question — do Western tech giants, including Google and Amazon, who both recently announced new voice assistant products in the last few weeks, have what it takes to compete?

While most of the devices currently on offer are very similar, Baidu differentiates itself through its focus on education and entertainment, allowing it to easily integrate within family life. Despite this, JD.com’s LingLong DingDong has been in the market the longest, so like Amazon’s Echo in the West, it’s currently the most popular and boasts the biggest market share. Alibaba’s Tmall Genie is similar to that of Amazon’s Echo, and lets you do all the things you would typically expect of a home assistant, users can also order online through Alibaba’s Tmall shopping site. What differentiates Tmall Genie from Western counterparts, however, is the price, retailing at 499 yuan (approx. 75 USD vs the new Amazon Echo which retails at 100 USD).

The battle, whether that’s in the West, Asia or globally, won’t be won through pricing alone but will be through effective integration of services and brands into the device. Already, the tech companies are making headway, with Amazon regularly updating its skill functions, but it would appear that players in Asia may be leading the way when it comes to brands capitalising on voice assistants.

Amazon has partnered with everyone from Domino's Pizza to EasyJet to create skills that help and improve a user's everyday life and Google’s recent partnership with Walmart, designed to fend off Amazon, shows that brands are already seeing the value of voice assistants and carefully considering who best to work with.

In China, however, we are seeing tech companies work with brands to create an individual product specifically tied to that brand. Recently, JD.com partnered with Nestlé to create what they are calling a “nutrition assistant”. An AI powered voice assistant that offers recipes and nutritional information to consumers.

We are yet to see a totally branded voice assistant in the West and it’s unlikely they will go down this route. There is a limit to how many brands will able to do what Nestle has done, consumers are likely to feel reluctant to have more than one voice assistant in their home and by integrating the brands into a single assistant, it’s far more likely to be a success. However, what this partnership shows is that the Chinese market is ahead of the game when it comes to building strong relationships with brands.

China has always been a challenge for Western tech companies. For Google, the current restrictions in the market mean that it is unlikely GoogleHome will flourish. Although Amazon does not face the same restrictions, it has struggled to differentiate itself in the market. The offering that makes it unique in Western countries - including free delivery and preferential prices - do not go far enough to allow it to compete, and well known local players offer comparable or better features. If any of the tech giants are to succeed in China with their voice assistants, they need to offer more than just localised language, but also deliver functions that are relevant to the region, including strong partnerships with brands that have a localised offering, as well as a solid offering to tempt consumers away from Alibaba or JD.com.

So far Western tech giants have yet to come up against their China counterparts. With Amazon joining Alibaba and JD.com in driving investment into Southeast Asia, we may finally see players go head to head as they battle to gain market share in the rapidly growing e-commerce region.

Ultimately, it’s unlikely that the Chinese players will pose a huge threat to Western businesses as their offering outside of China remains limited. However, within China the existing saturation of the market will present a challenge, particularly because consumers in market already have a strong offering from brands with which they are familiar. With Western and Chinese tech giants increasingly focused on Southeast Asia, it’s possible that this could become the battleground where the major competition between voice assistants is actually fought. For the first time we could see these platforms compete head to head, and only time will tell who will have the last word...

Richard Brosgill is head of APAC at Forward3D.

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