Alibaba (BABA) always claims that it's not China's version of Amazon.com (AMZN) , but the Chinese e-commerce giant is making the comparison hard to miss with the reported pending release of a Chinese-language home device to rival the Amazon Echo.
The device would only speak and understand Mandarin and would be for sale in China only, The Information reported on Thursday, citing sources familiar with the matter. The device has been kept under wraps but could come out as soon as next week, according to the unnamed sources.
"I have said for a while that Alibaba is trying to follow Amazon's model," Tigress Financial Partners CIO Ivan Feinseth said about the device.
Alibaba declined to comment on the report.
While both companies are considered the dominant e-commerce platforms in their respective countries, Alibaba CEO Jack Ma has said that Amazon is more like an empire because it wants to control everything themselves, whereas Alibaba is more like an ecosystem that empowers small businesses. "Our philosophy is, using internet technology we can make every company become Amazon," Ma said at the World Economic Forum in January.
Despite the different business models, Alibaba is keeping up with Amazon, Maybank Kim Eng head of Asia Internet and telecom equity research Mitchell Kim said. This device shows that Alibaba is serious about integrating AI into its platform, he noted. "We are beginning to see some of Alibaba's R&D," he said. "Hard to see how anyone could overtake BABA."
The Amazon Echo came out in 2014, but it's taken rivals time to come out with competing devices.
The other major smart speaker competitors come from two other big U.S. tech names: Google Home from Alphabet's (GOOGL) Google unit, and the recently announced HomePod from Apple (AAPL) . The Amazon Echo led the way with its launch in 2014; Google Home followed in 2016 and the HomePod is scheduled to arrive later in 2017.
These home devices aren't so much about the actual hardware as they are about giving customers access to software that encourages e-commerce activity and connectivity for The Internet of Things (IOT), Feinseth pointed out. These companies want to surround their consumers and create greater brand loyalty.
Alibaba and Amazon are also both trying to disrupt the supermarket industries in their respective home markets with the use of big data to figure out how to better stock stores, and through their massive distribution networks that allow for quick and convenient home delivery.
But even as Alibaba is getting serious about connecting with business partners in the U.S. with its conference for small businesses and farmers held in Detroit this month, the company's executives are maintaining that Amazon is not a direct competitor. Alibaba President Michael Evans told TheStreet this month that Alibaba is focused on Asian and developing markets, while Amazon is focused on Europe and the U.S.
"We're very different," Evans claimed. "I think people compare us to Amazon sometimes because they don't actually understand what we do."
Alibaba's stock was up 0.4% early Friday afternoon to $141.37 per share. Shares of Alibaba are up almost 60% year-to-date. Barclay's analyst Gregory Zhao said this week that his sum of the parts (SOTP) analysis values shares of Alibaba at $200 per share.