- Jul 27, 2017
JD.com on how AI is Driving the Future of Ecommerce
At the Rise Conference in Hong Kong in July, Eric Zhao, Vice President of JD.com, outlined how emerging technologies such as AI and automation are creating an entirely new shopping experience for consumers in China.
Zhao, who leads JD.com’s big data and search initiatives, told an audience of more than 200 tech and internet industry experts from around the world that JD.com is tapping into a vast trove of potential insights on consumer behavior. It now has more than 236 million active customers and processed over 700 million orders during its June sales event.
That means the team processes up to 15 petabytes of new information every single day – and they are now using these insights to generate unique new offerings for consumers and brands.
For example, every consumer who shops on JD sees a unique homepage showing an automatically curated selection of products tailored to their taste. Building on this, JD.com’s predictive logistics initiative can produce sophisticated portraits of consumer shopping habits down to the level of individual communities and local neighborhoods. This allows the team to anticipate demand before consumers even place their order and dispatch goods to local distribution centres in advance so that delivery can be made to consumers within minutes after they place their orders.
Zhao noted that when the iPhone 7 went on sale on JD.com, using predictive logistics the company was able to deliver the first phone to a consumer’s doorstep just 10 minutes after the order was placed – making ecommerce even faster than buying from a traditional retail store.
Brands are also benefiting from these insights – JD.com’s dynamic pricing initiative is using AI algorithms to optimize the pricing for more than 4 million SKUs stored in JD warehouse in real time, helping to maximize sales and profits– and significantly increasing the efficiency of the pricing process. Whereas in the past, the job would take up to 5,000 people – this can now be done by a small team of data scientists using sophisticated algorithms.
In the next phase of JD.com’s growth, JD.com aims to make more of these technologies available to more companies – not just those who sell their wares on JD.com.
The company is also using its AI and big data insights to develop innovative applications for automation technology. JD.com was the first company in the world to use drones to make commercial deliveries, and its fixed route drone delivery program for rural areas is rapidly expanding to more remote areas of China. It is also now planning heavy-load drones capable of carrying up to a ton.