Advertising is still in its infancy on smart speakers, but a new study expects it to mature quickly as inventory becomes more widely available – and China will be a crucial market.

According to media network OMD China, smart speaker sales in China soared by 500% year-on-year in the first quarter of 2019, taking the country past the US to become the world leader with half (51%) of global market share.

OMD China said such growth is being driven by innovative leading brands – such as Alibaba, Baidu and Xiaomi, which alone account for about 40% of global market share between them – as well as a wide range of choice for Chinese consumers.

This allows consumers to select a smart speaker based on an individual’s specific needs for features and applications, while discounting during key shopping holidays has also driven category growth.

OMD China based its findings on a survey of 500 owners of smart speakers in tier 1 cities and revealed that two-thirds (67%) own at least one device and a third (33%) are aged between 25 and 34.

They tend to be better educated – 86% hold a bachelor’s degree or higher – with seven in ten (71.3%) earning a monthly income of between Rmb 10,000 and Rmb 30,000.

These consumers regard smart speakers as a multi-use product, not just a voice assistant, and as a superior replacement to one or multiple devices rather than an additional device of its own.

According to the survey findings, the most-used functions are listening to music (72%), followed by the smart speaker being used as an alarm clock (58%), general information requests (55%) smart home appliance control (41%), listening to the news (36%) and engaging with children (29%).

The most important factors for consumers when considering whether to buy one are sound quality (61%), voice interaction experience (58%) and multiple functions with applications (50%).

And when it comes to advertising, around three-quarters (76%) say they don’t mind ads on smart speakers as long as they match the content. A similar proportion (73%) don’t mind ads if they match their interests, while 58% are open to ads if they are helpful in their shopping decisions.

“Our research has proved that users are open to relevant advertising,” said Samantha Jahnke, OMD China’s head of digital. “Brands should not rush out to aimlessly place ads on this new channel, [instead] focusing on the experience they will deliver and how it will be relevant to the listener.”

Sourced from OMD China; additional content by WARC staff