Oct 21, 2020|
Dr. Jianguang Shen: China Is Experiencing a V-Shaped Consumption Recovery
by Vivian Yang
Dr. Jianguang Shen, Chief Economist at JD Digits, spoke at the opening session of the World Economic Forum’s Job Reset Summit on October 20th to share his thoughts on China’s economic recovery and consumption trends under the theme of the “New Economic Context”.
“The [economic] recovery in China has been stronger than expected,” said Dr. Shen during the online discussion. “There is a V-shaped recovery on the consumption. According to JD’s big data, luxury goods consumption, in particular, has achieved over 50% growth [in the recovery period].”
Watch the replay of the opening session here.
As the virus is contained and normal life resumes in China, people have satisfied pent-up travel demand by venturing out during the National Day Golden Week holiday( October 1st to 8th ), and have shown an upsurge of spending desire on consumer goods. Dr. Shen pointed out that higher-income people who can work remotely during the lockdown still have strong spending power, whereas it is the lower-income people who are the most vulnerable, and whose consumption demand has been suppressed.
From a more macro perspective, Dr. Shen said that there are positive signs of China’s economic recovery, evidenced by a 9.9% export growth in September. Consumer electronics and home appliances are among the main categories China exports to the world, as people from many countries are needing these products to work from home during this period. At the same time, production in China has been very strong with a growth rate of almost 7% in September, which is even stronger than the same period last year. Consumption has picked up as well, but is still not as robust as production. But the excessive supplies from domestic production are well absorbed by the rest of the world.
In an exchange about how COVID-19 can promote the development of a green economy and ESG (environment, social and governance) efforts, Dr. Shen expressed confidence that the digital economy will help to drive carbon neutrality in China.
“Internet-based economy and digitalization will become a key driver of China’s growth in the next decade, or even a few decades,” Dr. Shen said. For example, mobile payment will spare the use of credit card materials and a lot of paper, and internet-based telemedicine services will enable more innovative healthcare solutions. “China is leading the utilization of big data and AI technologies, [which will drive the country] to be more efficient in reducing pollution and achieving sustainable growth,” he added.
The Job Reset Summit is a virtual event held by the World Economic Forum from October 20-24. The event has convened visionary leaders from business, international organizations, government, civil society, media and the broader public to shape a new agenda for growth, jobs, skills and equity.
Dr. Shen was joined in a panel consisting of Janet Henry, Global Chief Economist of HSBC Holdings plc; Catherine L. Mann, Managing Director and Global Chief Economist at Citi; Eric Parrado, Chief Economist and General Manager, Research Department at The Inter-American Development Bank; and Guy Johnson, a presenter from Bloomberg LP.
Watch the replay of the opening session here.
Sep 27, 2024|
Leveraging AI to Drive Innovation, Reduce Costs, and Create Jobs: Insights from JD.com’s Chief Economist
At the 2024 FORTUNE Global 500 Summit in Guangzhou on September 26th, Dr. Shen Jianguang, Chief Economist of JD.com, shared how the company utilizes AI to transform its operations across retail, logistics, and more, while driving significant workforce expansion. “By integrating advanced technologies throughout our business, JD.com has more than tripled its workforce in the past six years from 180,000 to 620,000, all while increasing salaries,” Dr. Shen explained during the panel discussion titled “‘Changes and Opportunities’—Chief Economists’ Perspectives.”
AI tools have enabled JD.com to boost efficiency and elevate the customer experience. For example, JD’s AI-driven digital human livestream hosts have helped over 5,000 brands increase off-peak hours’ sales conversion rates by 30%. Additionally, AI-powered customer service representatives offer more personalized support, and logistics couriers use AI to deliver packages faster and with greater sustainability.
JD.com’s customer service representatives
“The competition in China is so fierce, and that’s what drives innovation—you have to innovate to survive,” said Dr. Shen, underscoring the role of innovation in reducing costs and increasing productivity. This is especially crucial in China’s e-commerce landscape, where consumers are becoming more price-conscious. “Consumers are looking for the ‘extreme quality-to-price ratio,’ meaning they want high-quality products at lower prices,” he added. At the same time, Dr. Shen noted a growing trend in rural and lower-tier markets, where significant growth opportunities are emerging.
Dr. Shen also discussed China’s recent economic stimulus packages. “Policy initiatives are important. When people perceive a shift in policy, the market responds,” he said, referring to the government’s subsidies for home appliance trade-ins introduced earlier this year. This program has stimulated demand for affordable, high-quality products, as reflected in the increased sales of subsidized items.
Guangzhou, the host city for the summit, launched a new round of consumer goods trade-in subsidies on September 1st, positioning online platforms like JD.com as essential providers of seamless trade-in services. Over 800 home appliance brands have partnered with JD.com in Guangzhou, offering more than 8,500 products. Additionally, JD.com is working with its brand partners on a Customer-to-Manufacturer (C2M) model, leveraging consumer insights to drive innovation for more tailored products.
JD.com provides one-stop trade-in services for home appliances and home goods
The panel discussion featured Dr. Shen alongside Minggao Shen, Global Chief Economist at GF Securities, and Robin Xing, Chief China Economist at Morgan Stanley, with FORTUNE Editor-in-Chief Alyson Shontell moderating. The panelists agreed that while AI is still in its early stages, its potential is vast. With China’s stimulus policies and a functioning capital market, the private sector is well-positioned to unlock considerable industrial and social value.
JD.com ranked #47 on the 2024 Fortune Global 500, moving up five spots from the previous year. Guided by its mission to “Make Lives Better through Technology,” the company remains committed to cost management, operational efficiency, and enhancing user experiences, while continuing to invest in employee development and upskilling to foster both business growth and workforce advancement.
(vivian.yang@jd.com)
Apr 1, 2024|
JD Chief Economist: Tech-Driven Supply Chain Revolutionizes Gen-Z Consumer Engagement in China
At the inaugural FORTUNE Innovation Forum in Hong Kong on March 28th, Dr. Jianguang Shen, chief economist of JD.com, highlighted the transformative impact of tech-driven supply chain solutions in meeting the dynamic needs of Gen-Z consumers in China.
“Gen-Z consumers are very discerning and pragmatic,” said Dr. Shen. “They don’t care if the brand is local or global.” Dr. Shen began by discussing the increasing sophistication of younger Chinese consumers. “The rising popularity of local products can be attributed to China’s supply-side reform, which has enabled brands to provide lower-cost products with higher quality,” he said. Shen also emphasized the strategic advantage that brands can achieve by leveraging advanced digital supply chains, which offer deep insights into consumer behavior, thereby tapping into substantial market opportunities.
Joining Dr. Shen were industry leaders including Angela Wei Dong, Global Vice President China at Nike; Pontus Erntell, President and Chief Sustainability Officer at IKEA China; and Doreen Wang, CEO of Kantar China and Global Head of BrandZ. Together, they shed light on the shifting preferences of China’s youth towards quality, sustainability, and enhanced social engagement in their retail experiences, especially amid economic headwinds, prompting brands to adapt swiftly.
Drawing examples from JD.com’s platform, Dr. Shen discussed the rising popularity of eco-friendly mini refrigerators among Gen-Z consumers. These products, aligning with Gen Z’s penchant for tech-savvy and environmentally conscious offerings, underscore the necessity for brands to evolve and align with consumer preferences.
Furthermore, Dr. Shen discussed the positive impact of a new government policy encouraging trade-in of consumer goods, which is expected to boost consumption. Leveraging JD.com’s robust supply chain capabilities, customers not only can easily trade in old appliances for more modern and eco-friendly goods but also benefit from a suite of JD’s attentive services such as doorstep pickup, installation, and recycling.
The conversation also touched upon the strategic collaborations under the Consumer-to-Manufacturer (C2M) model between JD.com and numerous brands, aiming to streamline the journey from product ideation to distribution. This collaboration has welcomed over 4,000 brands to JD.com’s C2M platform, drastically reducing product research and market introduction times by 80% and 70%, respectively, thereby fostering a mutually beneficial ecosystem for brands, retailers, and consumers.
Dr. Shen concluded by emphasizing JD.com’s commitment to technological innovation, with its deployment of AI-driven chatbot customer service, highly automated warehouses, autonomous delivery vehicles, and integrated retail solutions that bridge both online and offline domains. These innovations are designed to meet the dynamic preferences of consumers, enhancing the overall shopping experience and setting a new standard in consumer engagement.
JD Super Accounts for Over 50% of Online Market Share in Multiple FMCG Categories
