Sep 28, 2020|
Five Key Takeaways from JD’s Supply Chain Technology Seminars
by Yuchuan Wang
Digital transformation of supply chain is helping every single enterprise build agility.
Last week, JD Logistics held supply chain seminars in Shanghai and Guangzhou, in which the logistics giant invited professionals and experts from supply chain, logistics, consulting, manufacturing, FMCG and other industries to discuss future trends in the supply chain industry, the application and innovation of advanced technologies and the potential of digital supply chain.
Here are five key takeaways from the workshops:
Technology provides the biggest opportunity for supply chain reformation
“Logistics is reforming from a single mode of transportation, intensive integration and ‘networking’ to being supply chain-based. This is the biggest opportunity for supply chain reformation in the next 10 years in China,” said Bing Fu, head of strategy at JD Logistics in his opening keynote.
Fu pointed out that over the past decade, front-end retail costs of logistics and express delivery in China have dropped significantly. China’s express and transportation fees are some of the lowest in the world. But the current development model has encountered bottlenecks with enterprise supply chain costs related supply, manufacture and circulation not decreasing in step. In this circumstance, JD Logistics will leverage technology to build an agile supply chain, which will connect more resources in one place to help clients optimize their enterprise supply chain.
Bing Fu, head of strategy at JD Logistics
Digitized supply chain makes enterprise management more flexible
“The current efficiency of enterprise supply chain and level of supply chain management are lagging behind,” said Shu Lou, managing director at Accenture Strategy & Consulting. Consumers will not stop their demands because of the limitations at the enterprise supply chain level. On the contrary, they expect more customized services, more choices and higher reliability.
A small step for intelligent algorithms, a big step for enterprise decision-making
Ping Ding, Director for Solutions at LLamasoft, a leading provider of enterprise supply chain design and decision-making solutions, said that it is important for enterprises to use digital “sand table deduction” to solve problems. Even if the accuracy rate is only improved by 1% through algorithm optimization, enterprises can benefit a lot. AI makes traditional supply chain decision-making more accurate and efficient.
“Let the right people do the right things”
Thanks to Unilever’s digital deployment, its Hefei (capital of Anhui province) factory has recently been recognized as an ‘Advanced Fourth Industrial Revolution Lighthouse’ by the World Economic Forum. Fangjun Han, supply chain vice president of Unilever’s North China region explained that the company handed over its supply chain network optimization to JD Logistics and LLamasoft to have the “right people do the right things”. She also revealed that Unilever is currently working with JD Logistics on exploring 5G smart logistics.
Digital solution is the strategic project
Yan Zheng, senior director of value supply chain at JD Logistics said, “Supply chain is the recipient of corporate strategy. Strategy determines organization and operations mode. That operation mode will eventually precipitate into data. Only when data contributes business development, can data assets be formed and value be generated. This is the major premise of the digital supply chain. Digitization is a strategic project, and executives need to have strategic determination and long-term persistence, precise and lean management, so that the data system can be effectively established in order to truly realize digitization.”
Bing Fu explained that Chinese enterprises will undergo a period of medium-and low-speed development for several years to come. But at the same time, innovative digital technologies will bring new development opportunities, which is the key for industrial transformation.
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.
A Matter of Life or Death: JD’s Suicide Prevention Hotline
