Google drops to third place for global smart speaker market share

Dive Brief:

Baidu's smart speakers have knocked Google Home out of second place in the smart speaker market, according to a new report by Canalys. Baidu, based in China, shipped 4.5 million units in the second quarter of 2019, compared to Google's 4.3 million.
"Aggressive marketing and go-to-market campaigns built strong momentum for Baidu in China," Cynthia Chen, a research analyst at Canalys, said in the company's report. "The vendor stood out as a key driver of smart displays, to achieve 45% smart display product mix in its Q2 shipments."
The U.S. market for smart speakers declined by 2.4% in the second quarter. Canalys estimates that 50% or more of smart speakers from Amazon and Google are being shipped to markets outside the U.S. Baidu's smart speakers, it should be noted, are only available in China.

Dive Insight:

Google's bump to third is the result of a few things, according to the report. The company hasn't had a smart speaker redesign in a while, and has been focusing on a transition in branding. "Google urgently requires a revamped non-display smart speaker portfolio to rekindle consumer interest," Canalys Senior Analyst Jason Low said in the report.

About 41% of U.S. consumers own a smart speaker, according to a January report from RBC Capital Markets. Amazon far and away leads market share in the U.S., according to that report, with more than two-thirds held by its line of Echo products. But, Baidu's breakthrough in smart displays may provide a clue to expanding the value of smart speaker owners.

Voice commerce sales amounted to less than half of a percent of U.S. e-commerce sales last year, per an eMarketer report. But beyond refilling frequent purchases like grocery items, consumers may need more than just voice commands to feel confident they're ordering the product they really want. Amazon's Echo Show may have an advantage in that realm, as could Google Home Hub, now known as Nest Hub.

Google also has competition from Alibaba, which ranked fourth in the Canalys report, commanding 15.8% of the Q2 market share, compared to Google's 16.7%. As U.S.-based brands like Google must look outward to the international market, they must also be prepared for the arrival of international brands.

Alibaba recently launched an English-language site to attract U.S.-based brands, following it with a digital platform for U.S. businesses to launch Alibaba storefronts. The Chinese e-commerce giant may not be a household name for U.S. consumers beyond its establishment of a yearly Singles Day sale, but Alibaba is continuing to make inroads toward U.S. consumers. Will its smart speakers and displays further shake up the market share?