China’s JD.com re­pro­grams re­tail with new tech

JD.COM EN­TERS THAI­LAND IN A MA­JOR RE­TAIL JOINT VEN­TURE WITH CENTRAL GROUP, ONLY SEC­OND FORAY OUT­SIDE CHINA FOR GI­ANT E-COM­MERCE PLAYER

The Nation - - TECH / START-UP - ASINA PORNWASIN

THOUGH JD.com Inc is al­ready a large e-com­merce player in China, it has an­other big goal in mind – to be­come known as the provider of tech­nolo­gies and in­no­va­tions that en­hance the busi­ness ca­pa­bil­i­ties of all re­tail-in­dus­try stakeholders.

Chen Zhang, chief tech­nol­ogy of­fi­cer for JD.com, said that e-com­merce is the lat­est rev­o­lu­tion to trans­form the re­tail in­dus­try at all three es­sen­tial re­tail fac­tors – cost, ef­fi­ciency and ex­pe­ri­ence – in or­der to keep up with mas­sive tech­nol­o­gy­driven changes in con­sumer be­hav­iour.

Rec­on­cil­ing the two will be the role of JD.com from its po­si­tion as a re­tail ser­vice provider.

“The rev­o­lu­tion is just start­ing and it is con­tin­u­ously pro­gress­ing,” said Zhang.

He said rev­o­lu­tion in re­tail in­fra­struc­ture is the most im­por­tant change in cus­tomer- fac­ing re­tail out­lets, whether chain stores, su­per­mar­kets, or e-com­merce sites.

To serve e-com­merce busi­nesses suc­cess­fully, the China-based gi­ant has re­searched and de­vel­oped in­no­va­tions fo­cused on the con­cept of “smart” re­tail, which in­cludes the smart sup­ply chain, smart lo­gis­tics, and smart mar­ket­ing.

JD. com has al­ready drawn on new tech­nolo­gies – in­clud­ing ar­ti­fi­cial in­tel­li­gence ( AI), big data, block chain, ro­bots and drones – to en­hance the ca­pa­bil­ity of its e-com­merce busi­ness and plat­form, as well as mer­chants and busi­ness part­ners it works with.

Zhang points to the com­pany’s JD Ex­clu­sive Priv­i­leges, a smart mar­ket­ing so­lu­tion based on AI and big data. It helps iden­tify and aid de­mand­ing cus­tomers of cer­tain prod­ucts, pro­vid­ing them with per­son­alised ex­clu­sive priv­i­leges from mer­chants and the JD pro­cure­ment and sales team. The re­sult – cus­tomers have a more en­joy­able shop­ping ex­pe­ri­ence.

An­other ex­am­ple is us­ing big data to help re­tail­ers with “dy­namic pric­ing”. It can rec­om­mend dif­fer­ent pric­ing strate­gies across re­tail cat­e­gories, pro­mot­ing trans­ac­tions with the best pric­ing ef­fi­cien­cies.

JD. com has also worked with four Chi­nese gov­ern­men­tal agen­cies and mer­chants to launch block chain ap­pli­ca­tions to track Kerchin beef around the world.

JD. com has also im­ple­mented smart lo­gis­tics ap­pli­ca­tions, in­clud­ing smart ro­bots for ware­house in Wuhan; im­ple­mented un­manned de­liv­ery ve­hi­cles for the daily op­er­a­tions at four uni­ver­si­ties in China; and set up a drone com­mand-and-con­trol cen­tre for the Suqian Daily news­pa­per op­er­a­tions in Suqian and Xi’an.

They can draw on more than 9,000 en­gi­neers be­tween China and Sil­i­con Val­ley to re­search ar­eas in­clud­ing data sci­ence, AI, vir­tual and aug­mented re­al­ity, au­to­ma­tion, robotics, un­manned ve­hi­cle sys­tem, and more. The break­throughs are adapted for use in ev­ery­thing from in­tel­li­gent pric­ing to in­ven­tory man­age­ment and fraud de­tec­tion – and more.

In China, JD.com’s lo­gis­tic net­work cov­ers 99 per cent of the na­tion’s pop­u­la­tion with over 65,000 de­liv­ery em­ploy­ees, 335 ware­houses (in­clud­ing large “ful­fil­ment” cen­tres, small ware­houses and “clod-chain” fa­cil­i­ties for tem­per­a­ture sen­si­tive prod­ucts) and al­most 7,000 de­liv­ery sta­tions.

“We have 13 years of ex­pe­ri­ence do­ing e- com­merce and fi­nance ser­vices in China and 18 months in In­done­sia,” said Zhang.

Re­cently, JD.com an­nounced its ex­pan­sion in the Thai mar­ket through an in­vest­ment of up to $ 500 mil­lion ( Bt16.5 bil­lion) to es­tab­lish two joint ven­tures cov­er­ing e-com­merce and fin­tech ser­vices.

Thai­land is the sec­ond coun­try in South­east Asia, af­ter In­done­sia, to draw the at­ten­tion of JD.com.

Zhang said that Thai­land’s Central Group is one of the largest off­line re­tail play­ers, while JD.com is the largest online re­tail player in China. Their com­bined JV plat­form will lever­age the best of each.

“E-com­merce and fi­nance tech­nol­ogy go closely to­gether. And fin­tec is to help with risk man­age­ment, which in­volves all stakeholders in the sup­ply chain as well as mer­chants and buy­ers,” said Zhang.

Un­der the terms of the agree­ment, half of the in­vest­ment will come from Central Group, with the re­main­der com­ing from JD.com, JD Fi­nance and Prov­i­dent Cap­i­tal, which is also JD. com’s strate­gic part­ner for its In­done­sian e-com­merce busi­ness.

JD.com will pro­vide its ex­ten­sive ex­per­tise in tech­nol­ogy, e- com­merce and lo­gis­tics to the e-com­merce joint ven­ture.

How­ever, it has two sep­a­rate ecom­merce plat­forms. One is its own JD.com, which would source prod­ucts from Thai­land to sell to peo­ple in China, while an­other one is a joint ven­ture plat­form, JV, which would source prod­ucts from both China and Thai­land to sell to Thai peo­ple.

“There are many rooms to grow in e-com­merce in Thai­land and in SEA,” said Zhang. “Cur­rently, only 2 per cent of the whole of Thai­land’s re­tail in­dus­try value is online re­tail or e-com­merce, and it is only 1 per cent in In­done­sia. But it is 15 per cent in China’s re­tail in­dus­try and 10 per cent in the United State’s re­tail in­dus­try.”

In China, JD.com could boast 153 per cent growth last year, with 136.1 bil­lion gross mer­chant val­ues and has 250 mil­lion active users.

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