Alibaba Group Holding Limited BABA is reportedly launching an Amazon AMZN like voice controlled speaker this week that is capable of taking orders in Chinese.
According to media reports, Alibaba’s artificial intelligence research teams have been developing this device that will be launched exclusively in China and allow domestic customers to order from the company’s website. That means the device won’t be hitting the U.S. market.
Another Example of Alibaba Following Amazon
In addition to the core e-commerce business, Alibaba has been getting involved into ventures that are similar to that of Amazon. From its offline push and blending online and offline features in retail to movies, cloud and artificial intelligence, Alibaba has been doing exactly what Amazon does in the U.S. If the recent reports are true, the move will just be another of Alibaba’s efforts to go the Amazon way.
Investors will surely keep an eye on how Alibaba’s efforts beyond online retail impact its share price, especially when it has appreciated a massive 76.9% over the last one year compared with the Zacks Electronic Commerce industry’s gain of 48.9%.
We see this “Follow Amazon” strategy of as an intelligent move to create strong entry barriers for the likes of Amazon. The company is trying to block all doors through which rivals can manage entry into China.
Alibaba Group Holding Limited Net Income (TTM)
Alibaba Group Holding Limited Net Income (TTM) | Alibaba Group Holding Limited Quote
The Growing Significance of Artificial Intelligence
Alibaba’s ability to innovate has translated into strong growth for the company. The company’s speed and scale of technological improvements clearly indicate that it refuses to rest on its past laurels and continues to adapt to changing market trends.
It appears that like other tech companies such as Alphabet GOOGL, eBay EBAY, Apple and Amazon, Alibaba too is banking on artificial intelligence and machine learning for much of its future growth.
The once nascent smart home market is already a potential area of growth, thanks to Amazon and Google.
Now, it remains to be seen how Alibaba could further disrupt the industry. A successful device strategy could not only attract more customers to its websites but also help it penetrate potential business areas through third party contracts.