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Chinese e-commerce giant Alibaba to invest USD 1.4 billion to build ecosystem around its Tmall Genie smart speaker

Despite a sharp drop in first-quarter sales because of the coronavirus pandemic, smart speaker shipments in China are projected to grow 9.8% in 2020.

Alibaba Group Holding's popular smart speaker, Tmall Genie. Courtesy of Alibaba via South China Morning Post. Alibaba Group Holding's popular smart speaker, Tmall Genie. Courtesy of Alibaba via South China Morning Post.

Chinese e-commerce giant Alibaba Group Holding will invest 10 billion yuan (USD 1.4 billion) this year to strengthen the artificial intelligence and Internet-of-Things (AIoT) ecosystem around its smart speaker Tmall Genie, as Chinese technology companies bet billions on what is expected to be the next big thing after smartphones.

The investment aims to expand Tmall Genie’s AIoT ecosystem by integrating more content and services from Alibaba’s ecosystem, ranging from entertainment to health care, education, and online shopping, according to a company statement on Wednesday.

Under the initiative, mini-apps on payments platform Alipay can be integrated with Tmall Genie starting from July 1. Consumers can also watch Taobao Live—the livestreaming of merchant sales on Alibaba’s Taobao Marketplace retail platform—through Tmall Genie’s screen.

In addition, the investment will see more AIoT technologies developed in-house, including an IoT operating system, edge computing, and visual and voice AI, the company said.

Read this: Smart speakers are a marathon of uncertainty in China

Tmall Genie will share its latest AIoT technologies, vertical market insights, product design skill sets, as well as content and service capabilities with partners to co-develop intelligent products, such as refrigerators, robot vacuum cleaners, and smart sportswear.

“By tapping into Alibaba’s diverse ecosystem and cutting-edge technology, we are committed to bringing in more unique experiences to our Tmall Genie users through enriched content and services,” said Ku Wei, who heads the development of Tmall Genie.

As one of the world’s fastest-growing smart speaker markets, China saw “explosive growth” of 110% in shipments of the device last year, according to IDC. The top brands remain Alibaba, search giant Baidu, and smartphone and appliance maker Xiaomi Corp, which make up more than 90% of China’s smart speaker market.

The stakes are high for Chinese vendors which have helped drive global shipments of these connected devices. These companies see the potential of tapping into a huge new user base, as more consumers become comfortable with voice-command methods on connected devices at home.

Tmall Genie CC10, the latest model which boasts a large 10-inch screen, debuted on Wednesday priced at 549 yuan. On the same day, a partnership between Tmall Genie and American fast food chain KFC was also announced, involving the joint development of a KFC-themed smart speaker. In the second half of this year, consumers will be able to order breakfast at KFC using the smart speakers’ screen and complete their order through a voice payment function.

“We are also partnering with brands to offer our leading AIoT technology, design ideas, and go-to-market advice, so they can be empowered to explore opportunities in the AIoT era, and more smart products can be rolled out to the market to enlighten consumers’ daily life, too,” Ku said.

Despite a sharp drop in first quarter sales because of the coronavirus pandemic, smart speaker shipments in China are projected to grow 9.8% in 2020, according to data from IDC.

Alibaba is the parent company of the South China Morning Post.

This article was originally published by South China Morning Post.