JD Supply Chain Alleviates COVID-19 Impacts, Facilitates Industry Resumption

Posted on by Yuchuan Wang

by Yuchuan Wang

During the epidemic, JD has been continuously delivering daily necessities for consumers and aid supplies to the epidemic epicenter in Wuhan, Hubei province, all based on the company’s investment in next-generation infrastructure, including its in-house logistics network, smart supply chain and technology innovation over the last decade.

 

Guarantee national supply

As the world is under the stress of COVID-19, the importance of building strong supply chain capabilities is being emphasized repeatedly in helping economic recovery. According to Sarah Watt, senior director at Gartner Supply Chain, “Supply has been impacted in three primary ways: limited access to employees due to quarantines, factory closures or manufacturing slowdowns and limited access to logistics to move goods.”

Thanks JD’s early investment in smart supply chain, which dates back to 2007, the company has been able to be extremely agile in supplying goods during the epidemic period. JD collaborated with suppliers to efficiently allocate goods, worked with manufacturers to resume production based on big data analysis and maintained continuously delivery across the country, even in Wuhan.

From January 20th to February 28th, JD supplied 220 million products to its nationwide consumers including 290,000 tons of rice and flour, eggs and vegetables. JD Logistics transported 50 million medical supplies, and JD Health collaborated with over 13,000 offline pharmacies to provide 30-minute delivery service.

JD’s supply chain also helped 3,900 tons of agricultural products that risked becoming unsellable due to the coronavirus outbreak to be delivered to consumers nationwide. For example, in Hefeng county, Enshi city in Hubei province, JD helped 350 local farmers make 50 tons of citrus for sale online, with over 1,500 orders per day.

 

Help brick-and-mortar stores resume business online

Through various omnichannel solutions, JD is helping tens of thousands of offline stores resume business online.

With the help of JD, over 700 Five Star Appliance’s stores are transforming into community warehouses to supply online orders from social platforms such as WeChat groups. It also helps JD sell online inventory, which is fulfilled by JD Logistics.

Based on Location-Based-Services (LBS), JD’s online sales events are enabling offline stores to interact with and deliver to its surrounding consumers. In addition, JD Live helps offline stores conduct live streams to attract consumers.

 

Ensure enterprises resume operations

TIEM is a manufacturer for gaming products in China. Affected by COVID-19, the company faced factory shutdown. JD quickly provided support in warehousing, logistics and supply chain financing for TIEM, helping the company fulfill its backlogged inventory and reach even more consumers.

At the same time, the company has helped support work resumption needs such as office supplies, protective equipment and services. JD’s enterprise procurement business JD Business has served over 1.3 million enterprise clients since the outbreak.

JD’s strong supply chain ability helped Chengdu Railway source and supply 60,000 protective supplies in as few as 48 hours.

JD also helped Deyin, an MRO (maintenance, repair and operations) products supplier from Qingdao, Shandong province, sell nearly RMB 1 million in products in half a month, helping the company increase revenue even when operations were temporarily shut down.

To get a sense of JD’s smart supply chain capabilities, take a look at the graphic below:

To get a sense of JD’s smart supply chain capabilities, take a look at the graphic

(yuchuan.wang@jd.com)

JD.com’s Experience Shops Bounce Back after COVID-19

Posted on by Rachel Liu

by Rachel Liu

JD.com has helped its “JD Retail Experience Shops” bounce back into solid business after COVID-19 through promoting omnichannel retail solutions, including livestreams and building online customer groups.

To keep employees and customers safe, most of the Experience Shops in China remain closed. The stores are spaces where customers can touch and feel products first-hand. Products range from digital products, cellphones, home appliances, books and other consumer goods sourced from JD’s business. With the outbreak of COVID-19, many store owners face significant sales reductions.

JD helped the store owners launch a series of livestream programs in partnership with brands to improve sales.

To address this issue, JD helped the store owners launch a series of livestream programs in partnership with brands to improve sales. From March 17th to 19th, twelve JD Retail Experience Shops launched livestream shows with OPPO to introduce its cellphone products, including the new OPPO Find X2 that was recently launched on JD. When Xiaomi 10 was launched in February, the shops also promoted the new products on livestreams and provided gifts and lucky drawings for JD customers. Viewership of the Xiaomi livestream increased 300% compared with the stores’ usual livestreams. Product purchases are made easy with customers simply clicking on affiliated links available on each livestream.

To meet consumer demand better while they are staying at home, JD Retail Experience Shops also encouraged store owners to build online customer groups, such as WeChat groups to share promotions and new products to customers. The stores can also provide individual tailored service to help customers pick out the most suitable products.

For the stores that are already reopened, JD’s private label J.ZAO（京造） provided nearly 20,000 items of disinfectant products for free to help the stores safely resume operations.

 

(liuchang61@jd.com)

In-Depth Report: The Logic Behind JD Health’s Today and Tomorrow

Posted on by Hui Zhang

by Hui Zhang

JD Health, the third unicorn launched by JD.com (after JD Digits and JD Logistics), is aligning with this service-centric strategy to go deeper and further in providing health care solutions to address unmet needs in the medical community in China.

Richard Liu, Chairman and CEO of JD.com, released an open letter to employees just before Chinese New Year in which he stressed the company’s strategic transformation to become a leading “technology and service company with supply chain at its core.”

A symbol of transforming into a service mindset, JD Health launched its Android and iOS version apps respectively in February and March, offering a more convenient way for patients to access JD Health’s services than limiting engagement through JD’s app. Lijun Xin, CEO of JD Health, said the logic of the health business was still focused upon retail logic before setting up its own app. Now, JD Health is focusing more on services and user satisfaction.

JD Health is focusing more on services and user satisfaction

The service logic behind JD Health’s business is designed to cope with challenges faced by not only patients but also hospitals and doctors in China. Patients are facing imbalanced distribution of medical resources, especially those living in remote areas of the country where proper medical care is in dire shortage. Hospitals are facing increasing medical costs due to the influx of an increasing number of patients into hospitals. However, the income of doctors has not significantly improved due to the separation of dispensing from prescription activities. Xin said China’s healthcare industry may be an RMB 10 trillion industry, offering enormous opportunities. JD Health wants to help patients with their health care management, providing more choices rather than going to hospitals just because of common illness or discomfort, while improving doctors’ income. Here’s how JD Health is developing its business to become more service-oriented.

 

Pharmaceutical E-commerce Business

JD.com entered the health industry by starting a pharmaceutical e-commerce business. It started the business by selling healthcare products online for the first time in 2013, marking an official step into the pharmaceutical retail business. In January 2016, JD Health started a platform for third-party pharmaceutical retail businesses and opened JD Pharmacy, the first-party pharmaceutical business model, the same year. JD Pharmacy, as a core part of JD Health’s B2C business, has become China’s largest pharmaceutical retail platform, online or offline in just three years. Its growth rate is four times higher than the industrial average in China.

In addition to the B2C business, JD Health also started its B2B business by setting up a medicine procurement platform called ‘JD Medicine Procurement’ in 2017 to improve the circulation efficiency of traditional channels and increase information transparency. The platform has been one of China’s key large-scale third-party pharmaceutical wholesale platforms since its establishment, covering 21 provinces and more than 400 cities, with more than 120,000 retail outlets offering more than 600,000 items.

JD.com is able to achieve such a large scale pharmaceutical business thanks to its strong supply chain. Before the establishment of JD Health, JD.com had already integrated the online and offline business by connecting with pharmaceutical enterprises, commercial enterprises, retail enterprises, and medical institutions through its supply chain.

Another growth engine of JD’s pharmaceutical business is its nationwide logistics network, which covers 99% of the population in China, to ensure drug supply provision to people the same day or next day, or even in just 30 minutes. Through cooperation with offline pharmacies, JD developed an omnichannel medicine delivery service to help pharmacies benefit more financially while providing rapid drug delivery services to patients. The service now covers nearly 150 cities in 25 provinces across China, with the delivery of drugs guaranteed within 30 minutes.

 

Online Healthcare Business

Following successful pharmaceutical business development, JD inevitably sought to integrate medical services with its pharmaceutical business. “If you want to expand vertically into the retail drug business, you must be integrated with hospitals and the medical services they provide,” said Xin.

JD started the Internet hospital business in December 2017, offering mobile phone and text consultations to patients. It has attracted over 30,000 doctors from all over the country to join JD’s Internet hospital, providing patients with professional medical consultation services that were previously difficult for them to access. Sixty-two percent of JD Health’s doctors come from AAA hospitals, and 90% of patients who choose quick online medical inquiry service can get answers within three minutes.

Since the outbreak of COVID-19, JD Health has set up a platform to prevent and fight against COVID-19, providing free online consultation services to consumers with COVID-19 related symptoms, and psychological services to both consumers across the country and frontline medical workers, and then expanded the free consultation to all kind of diseases. From January 26 to now, JD Health online consultation platform has served more than 5 million domestic users, with an average daily consultation volume of more than 120,000. JD Health also launched a free Global Chinese-English bilingual Health Consultation Platform to provide free online consultation and psychological counseling services to people around the world.

One of the critical steps for JD’s fast expansion in the process of building online healthcare services is cooperating well with hospitals

One of the critical steps for JD’s fast expansion in the process of building online healthcare services is cooperating well with hospitals. The need for establishing Internet hospitals in fact comes from hospitals themselves. While China is vigorously promoting the separation of medicine prescription and dispensing, which is the right direction to pursue, however, this has resulted in a decrease in income for most doctors and forcing doctors to transform.

This has also led to the transformation of hospitals to build online hospitals to enhance patient loyalty and extend offline services to be provided online. But the real problem is that most public hospitals do not have the ability to build Internet hospitals and lack operational capability. Most of the online health care platforms built by hospitals receive complaints by consumers that both the interface and its functions are too simple to use, and don’t provide comprehensive service to consumers by integrating online and offline.

JD, which has the country’s largest logistics network, and rich frontline experience in e-commerce, expanded cooperation with hospitals to speed up the digitalization of hospitals and improve doctors’ income in an innovative way. Since January 2019, patients in Suqian No.1 People’s Hospital in east China’s Jiangsu province can access online consultation services via a “Smart Clinic” WeChat service account, allowing them to seek the advice of the hospital’s doctors from the comfort of their home. The Smart Clinic, which is developed by JD, can also facilitate insurance payments for the medication in Suqian City.

“We built an Internet hospital for Suqian No.1 People’s Hospital based on our experience establishing JD’s Internet hospital, and it helped expand doctor’s working locations from staying regional to going nationwide,” said Xin.

 

Developing Intelligent Healthcare

JD Health is also exploring opportunities beyond the online pharmacy model by making its online healthcare “smarter” with artificial intelligence(AI).

AI has been applied broadly as a core component across many of JD Health’s services. JD Health uses AI to advise patients on the most appropriate department to make an appointment based on their symptoms. The function already covers 29 online clinic consulting departments, with accuracy exceeding 95%. The function can now offer services for over 77% of online consultation orders, and reduce labor costs by 50%, according to data from JD.

According to the World Health Organization, over half of all medicines prescribed are either dispensed or sold improperly. JD Health is now working with the leading Third Hospital of Peking University to integrate AI technology into the hospital’s information management system – introduced an advanced, AI-based prescription review and analysis system called PharmCOO (“Pharma chief operating officer”) that optimizes the clinical prescription process and improves patient safety.

The core of the new prescription review system is a knowledge graph based on the Third Hospital of Peking University’s vast database of pharmaceutical knowledge. In the past, pharmacists in China were merely seen as “dispensers” of medication, rather than a source of medical knowledge and guidance. New requirements mean pharmacists must carefully review all prescriptions that doctors prescribe to ensure there are no contradictions between medication, the dosage is correct, and the patient understands how to use each drug.

The advantage of the knowledge graph-based system is that it fulfills the role of a highly attuned and comprehensive expert for pharmacists. Using JD’s advanced natural language processing and deep learning technology, PharmCOO can provide doctors timely reminders on any issues, and consultation on the use of various drugs. It also can draw subtle, intelligent connections between a patient’s condition and potential allergies to medication. Rather than a static database, the knowledge graph-based system is unique in that also constantly learns from the experience of medical professionals, enabling it to improve accuracy, and taking the burden off of pharmacists to memorize troves of medical data so that they can prioritize learning the most pertinent information.

JD Health also opened up its sophisticated e-commerce technology and big data capabilities to pharmacies across China, enabling them to expand their traditional business models and enhance the products and services they offer to consumers. JD Health leverages its smart store technology to provide data-driven recommendations about which products to stock, helping member pharmacies increase sales. Working with JD Health enables pharmacies to expand their inventory to categories such as personal care, beauty, and baby and maternal products, giving customers more reasons to visit the pharmacy for their everyday needs.

JD’s program to partner with offline pharmacies was launched last year in a central Beijing branch of Golden Elephant,

JD’s program to partner with offline pharmacies was launched last year in a central Beijing branch of Golden Elephant, a leading pharmacy chain with more than 200 stores across China. Through the program, JD’s big-data technology analyzes information from smart cameras and other sources that help the pharmacy understand information about customer preferences and consumption habits. The pharmacy can use this information to optimize product selection and drive sales by branch.

“JD’s big-data capabilities help us understand customer behavior and preferences in our store in ways that were never before possible,” said Xiao Jun, a spokesperson from Golden Elephant Pharmacy. “With this new information, we can completely reevaluate our store operations. Now we are able to anticipate demand, optimize inventory, increase sales, and acquire new customers.”

Among Chinese technology companies, Alibaba, Tencent, and Baidu entered into the health service industry earlier than JD

Among Chinese technology companies, Alibaba, Tencent, and Baidu entered into the health service industry earlier than JD, and there are great differences in their business exploration paths. In addition to these big tech companies, there are also other vertical companies in the industry. Some claim that JD is a little bit late in starting the business, but there are advantages.

“Starting the business late allows us to see the pattern of the industry and the pain points more clearly,” said Xin.

For future plans, JD Health is targeting the whole healthcare industry and is endeavoring to help JD’s over 360 million consumers in full life cycle health management by always placing consumers’ experience at the center.

 

(zhanghui36@jd.com)

In-Depth Report: When Bookstores Meet JD.com

Posted on by Tracy Yang

by Tracy Yang

Since July 2019, Wuliao Bookstore, which first opened in Wenzhou, Zhejiang province, has cooperated with JD.com. All of the books in its three bookstores are sourced directly from JD.com, with replenishment services from JD’s nationwide, in-house logistics network, helping to significantly save on labor costs and delivery delays. Instead of dealing with around 15 publishers, Wuliao Bookstore only needs to work with JD.com.

Da Zheng, head of Wuliao Bookstore’s e-commerce business said, “JD.com is famous for product authenticity and fast delivery. The cooperation with JD.com can help the store improve its operational efficiency and increase inventory turnover rate.”

At present, Wuliao Bookstore operates eleven stores total in Wenzhou, Chengdu and Shanghai. It has earned the title of the “most beautiful bookstore” in Zhejiang province.

Wuliao Bookstore advocates that “Reading makes life more beautiful,” and their team has tried its best to integrate lifestyle elements in the bookstore. For example, they will combine a bookstore with indoor archery, and incorporate cultural elements such as Hanfu, ancient Chinese clothing. In their eyes, the key to the transformation of offline bookstores is providing consumers a reason to tour around the bookstore, and that reason must be beyond buying books. Wuliao Bookstore’s business model combines retail, exhibition and advertising.

Many bookstores have an online presence on JD.com

Many bookstores have an online presence on JD.com. The sudden outbreak of COVID-19 has boosted their sales, especially those bookstores who have chosen to use JD Logistics’ warehousing and delivery service. In February 2020, sales of two children’s bookstores, Caldecott Bookstore and Zhongshang Children’s Books Flagship Store have increased by 221.6% and 282% respectively, compared with same period last year. The main reasons is that Chinese consumers staying home during the epidemic period are turning to books for inspiration and encouragement. JD Logistics continued to deliver products to Chinese consumers as usual during the epidemic period and there are a series of disinfectant measures implemented to make sure that Chinese consumers can get books safely.

E-commerce seems to have disrupted the US book market. After starting to sell books online, US e-commerce giant Amazon has occupied the vast majority of this market for quite a few years now. The company’s entry into the offline bookstore market a few years ago forced offline bookstores like Borders out of business, and Barnes & Noble to close many stores across the country. What about other markets in the world? In China, where the penetration rate of e-commerce is higher than in other countries, what is the state of offline bookstores? Will China’s e-commerce giants also follow its US counterparts and put an end to offline bookstores?

 

China’s Offline Bookstore Market

According to the 2019-2020 China Offline Bookstore Industry Report, there are more than 70,000 bookstores in China, 21,800 in India, 13,968 in the US and 6,000 in Germany. In 2019, over 4,000 new bookstores opened in China, compared with just 99 in the US and 15 in the UK. The five cities in China with the most bookstores in 2019 are Chengdu, Nanjing, Shenyang, Xi’an and Chongqing.

In 2019, the bookstore industry experienced rapid growth. Supported by government policy, campus bookstores, especially university bookstores, have become the focus. In addition, the traditional bookstores have been upgraded. Longhua Book Mall, the sixth Book Mall in Shenzhen, Xinjiang International Friendship Book City, and Huanggang Yiai Lake Book City in Hubei province have opened one after another. China currently has 135 book malls that are over 5,000 square meters each, of which 35 are over 10,000 square meters.

The overall function and operations model of offline bookstores need to adapt to new consumption trends. Bookstore innovation should focus on business model, supply chain, e-commerce, big data-driven solutions and more. The industry predicts that in the next ten years, the world’s largest bookstore brand will be from China.

 

COVID-19, a Further Push for Offline Bookstores to Transform   

Although China’s offline bookstores are developing vigorously, the sudden outbreak of COVID-19 has had a great impact on retail industry, and offline bookstores are no exception. The epidemic has led to the temporary shutdown of offline bookstores, a shortage of employees due to the epidemic, a sharp drop in operating revenues, and a surge in pressure on store rents and staff spending, all of which have presented a dilemma for the industry.

Quest Mobile, a mobile Internet data analysis agency, released a special report on the fight against COVID-19 in China’s Mobile Live Broadcast Industry. The report shows that under the epidemic, the development of the live broadcast industry has accelerated, showing major trends of “further expansion of live scenarios and content”. Considering offline entertainment is cancelled, people socialize, entertain, obtain information, learn skills, seek medical advice, and sell products on the Internet, all from home. As a result, various live broadcast formats have caught the public’s eye, including online clubbing, online travel, online museum visit, online theater performance and others.

Based on this observation and combining scenario advantages of offline stores, JD.com’s offline book team came up with an idea to help offline bookstores to do live broadcasts to drive traffic to the bookstores and promote their brand awareness. Offline stores usually pay special attention to decoration, layout and products, so they are a perfect venue for live broadcast in term of providing robust scenarios and content. Considering bookstore owners have limited knowledge about live broadcast, JD.com’s offline book team has provided a series of supportive measures, including training for live broadcast, account sign up for bookstore owners, a channel to propose and discuss the themes, and promotion opportunities.

Jiao Zhang, Operations Manager of JD’s Offline Book Team said, “Supporting offline bookstores to do live broadcast is a good example of how JD.com has been using its resources to help offline bookstores to transform their businesses to better cater to the needs from Chinese consumers, especially when there is limited traffic in offline bookstores during the epidemic period.”

Usually each live broadcast will last one hour and bookstores might increase the time to 2-3 hours based on the topics of the session. Bookstore staff will serve as the moderators, guide a tour of the bookstore and give a detailed introduction to recommended products. If the products are available on JD.com, they will appear on a separate page and consumers can buy them immediately, and have them delivered in as fast as 12 hours. Take a model of a globe for example. When customers are just browsing in a bookstore, they might simply look over the globe. But through the live broadcast, they can understand more of the special features of the product, increasing the chance they will make a purchase of something they may have totally ignored.

“We are also considering opening an online store on JD.com to drive traffic to offline stores and testing the new supply chain innovation program, namely the integration of online and offline sales of the books.”

Apart from trying out live broadcast, offline bookstores are also starting to think about other ways to deepen their cooperation with JD.com. Da Zheng, head of Wuliao Bookstore’s e-commerce business said, “We are also considering opening an online store on JD.com to drive traffic to offline stores and testing the new supply chain innovation program, namely the integration of online and offline sales of the books.”

First launched in September 2019, this program was first carried out in the fast-moving consumer goods category. Currently bookstores are welcomed to join the program. With the system integration between offline bookstores and JD.com, after the consumer selects products, they can choose to have them delivered from the nearby bookstores or from JD’s warehouse. If the products are delivered from nearby bookstores, the consumer can get them within two hours – much faster than the standard same and next day delivery service provided by JD Logistics.

 

Innovative Ways to Promote Book-Related Industries

In addition to empowering offline bookstores, JD.com is also eyeing using the Internet+ model to upgrade the library industry. Traditionally, the library buys the books and offers them to members. Currently, with the integration of JD.com’s system and the library’s system, its members can select books from JD.com directly and have them delivered by JD Logistics, while the payment will be handled by the library. When the members finish reading their books, they can return them to the library, which will have the books cataloged on the shelf in the library, after which they can be checked out by other members.

Chongqing University is a pioneer in embracing the new model. Not only is the process of book purchase is simplified, members can also get newly-published books from the library immediately. After ten days of implementation of the program, book sales reached RMB 260,000 with 4,000 books purchased by over 1160 consumers. New books published in 2019 accounted for 43% of the sales.

Qingtai Zhang, Channel Manager of JD’s Book Team said, “JD.com’s books can be regarded as books in the library, so the library does not need to purchase a large number of idle books. This helps overcome the limitations of the traditional collection model and further improves members’ satisfaction.”

Despite the fast growth of the online book business in China, e-commerce does not seem to be disrupting the offline bookstore industry. Instead, Chinese e-commerce companies acts as enablers to assist in the transformation of offline bookstores to be more innovative and to better cater to the needs of Chinese consumers. Chinese e-commerce companies like JD.com are also involved in helping publishers and printing companies – the upstream suppliers of the book industry – to be more agile and efficient thanks to its strong supply chain and logistics capabilities built up over years.

 

(tracy.yang@jd.com)

Technology and Service Are in JD’s Genes; Dr. Bowen Zhou: Helmsman of JD Cloud & AI

Posted on by Yuchuan Wang

by Yuchuan Wang

JD.com is in the process of transforming itself from a retail company to a technology and services enterprise. The company is now one of the highest investors in R&D among Chinese Internet companies. As the chair of JD’s technology committee and president of JD Cloud & AI, Dr. Bowen Zhou is acting as the helmsman to lead JD’s technology transformation.

 

Going Abroad – AI Dream Starting with Deep Blue

On May 11th, 1997, an IBM computer called Deep Blue defeated a world chess champion in a tournament for the first time: two wins for IBM, and one for the champion, Garry Kasparov, and three draws. Not only was this a historical day in the challenge of man vs. machine, it has also become one of the key milestones in the development of artificial intelligence technology. Multiple parallel processors enabled the supercomputer to calculate more than 200 million chess moves per second.

Screenshot of CCTV's Dialogue show

Screenshot of CCTV’s Dialogue show

“The photo was taken on a summer night in 1997. I was working in my laboratory on speech and semantics-related research,” said Dr. Bowen Zhou, who was studying at Chinese Academy of Sciences for his M.E. degree at the time. “I was shocked by the news that Deep Blue defeated Kasparov. But it also inspired me to wonder, if coupled with the ability to understand language, how will the powerful computing and reasoning ability of Deep Blue change the world?”

Motivated by Deep Blue, Zhou enrolled at the University of Colorado at Boulder in 1999 to study for a PhD in artificial intelligence. He wished to combine his study with computing power and develop some new systems that might have a big impact on human lives.

In 2003, Zhou finished his PhD and joined IBM Research, just as he’d hoped to. “Joining IBM was my dream; my office was even on the same floor as the Deep Blue team,” he said. That same year, Zhou developed the world’s first embedded large-vocabulary speech-to-speech bi-directional real-time translation system, leaning on technologies such as speech recognition, machine translation and speech synthesis. It enables users to communicate by voice in multiple languages via portable devices and can work efficiently even without network connection.

Since then, whether doing research or leading a team, Dr. Zhou’s first consideration for any technological development is the feasibility of application and the true value it brings to users. “I don’t chase after trends. I will sometimes choose something unpopular. So long as it is valuable, I’ll stick to it,” he explained.

Dr. Zhou later joined IBM Watson Group, which is the world’s first AI platform for enterprise-ready AI services. As chief scientist at IBM Watson, Dr. Zhou focused on technical empowerment of traditional industries. He and his team launched several game-changing applications such as Watson NLU Services and Watson Assistant, which were later used by IBM’s clients in industries such as tourism, service, banking, insurance, legal, transportation, education, gaming and medical care.

“Coincidentally, towards the end of my 15 year-career in AI research at IBM, the former main R&D leader of the Deep Blue team joined my team and reported to me.”

 

Coming Back to China – Exploration of Large-scale AI Application

In 2017, Richard Liu, the founder, Chairman and CEO of JD.com, emphasized the nature of the company’s transformation, promising that JD “will leverage technology to transform the business model we built over the first 12 years to become a purely technology company.” That same year, Dr. Zhou completed nearly two decades’ of study and work in the United States, and returned to China to join JD.com, as the head of JD AI Platform and Research, to fully lead JD’s AI academic research and technology commercialization.

“With the rapid development of China, there is a great need for emerging technologies such as AI. There is no doubt that China has the richest AI application scenarios and a group of diligent talent. To generate the true value of technology, we must carry out our research based on real operations and real scenarios. JD.com has a lot of such scenarios as China’s largest retailer, across retail, e-commerce, logistics and finance and more. This motivated me to come back to China to do research and application.” Dr. Zhou hopes the next milestone for AI, no matter if it is in fundamental technology or commercial application or improvement for people’s daily lives, will be born in China. He wants to not only be an outstanding scientist, but also the scientist with the best understanding of applications of technology in business.

After joining JD.com, Dr. Zhou and his team published over 130 papers in top AI conferences and periodicals, and won 12 international championships in CVPR, ECCV, WikiHop as well as in other international academic competitions. He also led the commercial launch of a number of technologies to both optimize JD’s internal business and service external clients.

Dr. Bowen Zhou at the press conference to launch NeuHub in April 2018

Dr. Bowen Zhou at the press conference to launch NeuHub in April 2018

In 2018, Dr. Zhou’s team released the NeuHub open AI platform, targeting to provide the core advanced AI technology covering natural language processing, speech recognition, computer vision, and machine learning, etc., to JD’s internal business, external developers, small-to-medium sized enterprises and even students at a very low threshold. Since its launch, it has served thousands of clients, with daily inquiries exceeding two billion.

 

Becoming the Helmsman of JD’s Technology Service Strategy

With one of the largest e-commerce fulfillment infrastructures in the world, as well as a wealth of technology expertise proven in diverse real-world scenarios across the company, JD has opened up its services to partners in many different industries expanding the impact of its technology well beyond its own territory.

To continue to drive the company’s technology transformation, last December, the JD Technology Committee was formed, and Dr. Zhou was appointed as the Chair. On March 5th, JD announced that JD Cloud & AI under Dr. Zhou’s leadership, would be the fourth core business to provide technology services, joining the ranks of its major businesses, JD Retail, JD Logistics and JD Digits. Dr. Zhou has now become the commander-in-chief of JD’s top-level technical design and commercial application. He is also responsible for the building of JD’s technology brand, talent team, and promoting JD’s technology service strategy.

Dr. Bowen Zhou, second from left, at Davos 2020 (Read Dr. Zhou’s article on “Trustworthy AI” from the World Economic Forum’s blog here)

Dr. Bowen Zhou, second from left, at Davos 2020 (Read Dr. Zhou’s article on “Trustworthy AI” from the World Economic Forum’s blog here)

“Our research and development is broken down into ABCDE (AI, Big Data, Cloud, Devices, or IoT, and Exploration), and can serve as a model for other companies,” Said Dr. Zhou. “Looking more closely, if we are to imagine ABCDE as representing different parts of the human body, AI represents the brain, IoT represents the nerve endings, Cloud Computing represents the torso, muscles and blood vessels, and Big Data represents the oxygen that runs up and down the body. Finally, E is about maintaining a degree of curiosity, exploring new practices and pushing the edge of the aforementioned ABCD technologies.”

Under “E”, Dr. Zhou will also establish an exploration research institute, where global scientists can partner with JD on academic and commercial collaborations.

Below is a Q&A with Dr. Zhou where he shares his thoughts on JD’s technology services strategy.

Q：Why does JD position technology service as a key strength?

  • Every technical strength of JD has originated from JD’s own rich and diversified scenarios that have been tested repeatedly in real applications. Internally, technology has brought enormous improvements for JD’s operations, cost and efficiency.
  • It is quite natural for JD to open its accumulated mature technology services to external partners, from e-commerce to logistics to finance, to enable partners down and up the supply chain to improve their own efficiency.
  • For example, to support JD’s own business, we built JD’s smart customer service that can detect human emotions and provide appropriate response which has helped improve our user satisfaction by 57%. Right now, the technology has been provided to clients such as China Unicom and Affiliated No.2 Hospital of West China of Sichuan University to deal with customer inquiries in different scenarios.

Q：Amidst the fierce competition, what are JD’s advantages offering technology service?

  • In addition to JD’s technology abilities and rich application scenarios, there is no doubt that service ability is one of our competitive strengths.
  • One of my observations is that when some of the internet companies in China from the consumption end start to transform to provide enterprise services, they all face a similar challenge – their service ability.
  • But JD.com, as a reliable retailer trusted by hundreds of millions customers and partners has always had a strong awareness for providing the best services. We’ve built a reputation for rapid logistics service, quality products and a zero-tolerance of counterfeits. Service is in JD’s genes. So, in technology services, we also uphold this value. Apart from technical ability, this is one of JD’s most valuable advantages.

Q：What inspirations have COVID-19 brought to JD’s continued development?

  • I think the sudden outbreak is a big test for the digital infrastructure of not only China, but also the whole world. Different enterprises with different degrees of digitization are performing completely differently faced with the same epidemic, both in terms of the speed of recovery and the scale of operations resumption. COVID-19 will undoubtedly accelerate the digital transformation across various industries. This is a very obvious trend that I see.
  • For JD, our solid digital infrastructure and supply chain ability played a powerful role in fighting against the epidemic. Since the outbreak, JD has supplied 220 million items of daily needs products to nationwide customers. At the same time, as JD’s main technology service provider, JD Cloud & AI have ensured the work efficiency of our employees while releasing 16 technology products.
  • For example, our emergency information platform has served more than 20,000 clients including 645 municipal departments and 560 medical institutions, and supplied 660 million products. JD’s cloud video conferencing service has been offered for free for over 3,000 enterprises and its free online classroom service has been offered to students and teachers in Hubei province.
  • Because of JD’s long-term technology accumulation, we have the ability to respond and develop new services and products in such a short period of time.

 

(yuchuan.wang@jd.com)

In-Depth Report: JD.ID CEO Zhang Li: Eyeing Sustainable, Trust-Oriented Growth in Indonesia

Posted on by Martin Li

by Martin Li

It took four years for JD.ID, to extend its delivery service to over 90 percent of the 34 provinces in Indonesia via its logistics network, which is composed of over 69,000 square meters of warehouses and over 16,000 square meters of sorting facilities.

JD.ID is an e-commerce joint venture of China’s largest retailer JD.com, in partnership with Gojek and Provident Capital.

JD.ID has already achieved same-or-next-day delivery for over 85 percent of its orders throughout the country – an impressive achievement in a country of over 17,000 scattered islands. Customers’ satisfaction rate with delivery timeliness for products sold on the company’s direct-to-consumer platform has reached almost 99 percent.

“Only by storing products as close to customers as possible can we ensure fast delivery,” said Zhang Li, CEO of JD.ID and VP of JD.com.

Milestones in the past four years of JD.ID.Milestones in the past four years of JD.ID.

Zhang has been working with JD.com for ten years and was tasked to head JD.ID for its trial operations in 2015. JD.ID started official operations on March 28, 2016.

“We will continue our efforts in developing our logistics infrastructure to bring better delivery service to customers in Indonesia, “said Zhang.

“At JD.ID, we focus on three things,” said Zhang. “Delivering trust to consumers through authentic products and fast delivery, providing service to corporate clients with our advanced logistics capabilities and technologies, and developing technology-driven omnichannel experiences in Indonesia.”

 

Share core values of JD.com

It was during the Chinese Spring Festival that COVID-19 started having its impact felt in Indonesia. In the most populous country in Southeast Asia, people frantically rushed to buy face masks and other medical supplies.

The huge demand for face masks led to a short supply and price hikes as high as ten times the original price. However, in its commitment to the health and safety of its consumers, JD.ID supplied 10 million face masks to the local market through its direct-to-consumer e-commerce platform without increasing prices. The masks were sold out within just two weeks.

“This differentiates us in the current situation,” said Zhang.

JD.ID opened its new office in central Jakarta in November, 2019.

JD.ID opened its new office in central Jakarta in November, 2019.

On March 19, Zhang sent out an open letter via social media today, pledging to prioritize supply of daily necessities which are in high demand in Indonesia, as COVID-19 becomes increasingly challenging.

“We understand the concern and anxiety over food supply, daily needs and sanitation products. With this in mind, JD.ID will continue to focus on prioritizing the restocking and delivery of essential products that are most in demand and in need. Our supply chain and logistics arms are now more vigilant than ever in ensuring goods are delivered to your home as fast as possible,” Zhang said in the letter.

The ability to ensure critical supply is just one outcome of JD.ID’s commitment to seek sustainable and trust-oriented growth in Indonesia over the past four years.

Instead of burning money to pursue short-term sales and traffic – a common practice in the region’s hot e-commerce market, JD.ID is taking a different and lower profile path to growth, fixating on building and consolidating a foundation for trust grounded in supply of authentic products and in-house logistics.

In Zhang’s eyes, JD.ID shares the core value of JD.com: trust. Headquartered in Beijing, China, JD.com had over 362 million active customers by the end of 2019 and is widely recognized for its authentic and quality products, and fast delivery. JD.com was one of the few companies in China to maintain daily delivery to consumers during the COVID-19 outbreak in China.

 

Commitment to authentic products

The company’s commitment to “Dijamin Ori,” which means “authentic products” in Indonesian, has been receiving increasing recognition and popularity among Indonesians. A combination of a direct-to-consumer platform as the pillar and a marketplace for third-party merchants who share a commitment to authenticity, JD.ID witnessed 33 times growth in the number of customers who placed orders in 2019, compared with that of 2016. Today, there are more than 30,000 merchants on JD.ID.

Among the most popular products for JD.ID users are electronics such as smartphones and tablets, home appliances, food and health products, and maternal and baby products.

During the Singles Day (also referred to as “Double 11”) shopping festival on Nov. 11th last year, the company witnessed an increase in daily active users of over 93 percent YoY. The most popular categories were grocery, health care products, electronic gadgets like mobile phones, and home appliances.

“Our platform has become a popular shopping destination for people who attach great importance to product quality,” said Zhang.

JD.ID X , an AI experience store, opened  in PIK Avenue, North Jakarta, in 2018.

JD.ID X , an AI experience store, opened  in PIK Avenue, North Jakarta, in 2018.

Around 60 percent of the people who make purchases on JD.ID are below age 35. This reflects a growing trend among young people who care about quality and service in Indonesia, according to analysis done by the JD Big Data Research Institute in Beijing.

“Many Chinese and Indonesian brands choose JD.ID because they share the company’s commitment to authentic products. These brands don’t want to associate with low-quality and even counterfeit products,” said Zhang.

Renowned Chinese smartphone brands, including Huawei, Xiaomi, OPPO and Vivo, started to see growth on JD.ID from 2017. Last year, 33 percent of the smartphone sales on the platform went to the Chinese brands.

“Sticking to authentic products may cost the company some short-term benefits in a fast-growing market, but it’s worth committing to it, because this will bring long term value to customers and the whole industry,” said Zhang.

There were 152 million Internet users in Indonesia by the end of 2019, according to e-Conomy SEA 2019 by Google and Temasek. The gross merchandise volume (GMV) of the e-commerce industry in the country is forecasted to reach US$82 billion in 2025, ahead of all other countries in the region.

 

In-house logistics

JD.ID’s determination to build in-house logistics originated from JD.com, which is able to deliver 90 percent of its orders same-or next-day in China thanks to the company’s self-operated and tech-driven logistics network. JD.com’s logistics network is composed of 700 warehouses totaling 16.9 million square meters and covers 99 percent of China’s population

Asked whether self-built logistics in island-scattered Indonesia means high costs, Zhang said, “We eye long-term value for customers and the industry.”

Once a big challenge to e-commerce in the region, logistics has turned into a business opportunity for established players. This points to the entrepreneurialism of the Southeast Asian Internet economy: when problems arise, companies find solutions to address them, generating new revenue sources, according to e-Conomy SEA 2019.

While developing its own logistics strength, JD.ID also sought to improve its delivery service via strategic partnerships in the region. The company has partnered with Gojek on J-Express(JX), a last-mile delivery logistics joint venture.

 

Partner trust

Last year, JD.ID started providing warehousing service to leading multi-national company IKEA in Indonesia. In addition to IKEA, companies like Mitsubishi, Mr. DIY and KK Indonesia are using JD.ID’s warehousing and delivery services.

“When a foreign consumer brand enters Indonesia, it would be a huge cost to build its own logistics infrastructure. They need a partner who is both knowledgeable about the local market and has the related strengths… With self-owned and operated warehouses and a mature logistics system born from the retail scenario, JD.ID is a natural choice, “said Zhang.

The number of enterprises approaching JD.ID for potential warehousing cooperation is on the rise, and is the result of the company’s commitment to authentic products, according to Zhang.

“The reputation as an authentic product supplier among consumers is also recognized by enterprise partners. Combined with our strength in procurement, warehousing and delivery, it is natural for them to trust us to do the job, “said Zhang.

Zhang said the increasing popularity of JD.ID with enterprise partners has further strengthened the company’s commitment to delivering trust.

JD.ID piloted its first drone delivery in Indonesia in 2019.

JD.ID piloted its first drone delivery in Indonesia in 2019.

 

Looking ahead

Looking ahead, Zhang said that JD.ID will seek to create sustainable value for customers in Indonesia by ‘building muscle’ in supply chain, warehousing and logistics, omnichannel technology and talent development. “The process of building the company’s muscles is also a process of talent growth,” said Zhang.

There are four key factors for the development of e-commerce in Indonesia: payment, supply chain, inventory-related technology and talent, according to Zhang.

On the technology front, “JD.ID will continue bring innovative retail technology to Indonesia, integrating it with local demands,” Zhang said.

Indonesia is home to JD.ID X, an AI experience store built by the company. It is located on PIK Avenue in North Jakarta and is close to the Jakarta Soekarno-Hatta International Airport. JD.ID also piloted its first drone delivery in the country last year.

“While giving better service to customers by means of technology, JD.ID will also seek to enable local SMEs with its technology,” said Zhang.

Talking about himself, Zhang said that he has developed quickly with JD.ID in the past four years.

“Looking ahead, I long for continued growth with the company and our 1,200 employees,” he said. Ninety-five percent of the employees at JD.ID are Indonesian. The average is 33 years old.

“At JD.ID, we set targets for young people and encourage them to explore. Young people are trusted and encouraged to seek innovative ways to solve problems,” said Zhang.

Zhang recalled that he himself received tremendous trust and support from JD.com. He was tasked to manage procurement and sales of a variety of product categories during his time with JD.com in China, including electronics, food and fresh products. These experiences equipped him well to brace for challenges in a foreign market.

 

(bjlihao3@jd.com)

JD Big Data: New Type of Work Resumption; New Consumption of Telecommuting Supplies and Electric Lunch Boxes

Posted on by Yuchuan Wang

by Yuchuan Wang and Ella Kidron

On March 23rd, JD Big Data Research Institute released its report, “A Glance at Work Resumption Trends through Consumption Data”. The report analyzed sales data on JD.com from more than 40 major cities in China, together with sales data from key cities’ business or financial centers, industrial parks and office buildings (referred to below as “office districts”). The report shows:

  • Beginning in late February, the growth rate of consumption driven by work resumption peaked, while consumption of remote education-related devices appeared earlier.
  • Nationwide consumption patterns have changed in step with gradual work resumption. In early and middle February, growth was mainly driven by remote conferencing audio or video equipment while electric lunch boxes increased the fastest in late February. In early March, sales of mobile phones, home appliances and computers increased significantly.
  • Consumption growth driven by work resumption is particularly obvious in southern China where, apart from Beijing, Shanghai, Guangzhou and Shenzhen, the recovery of the offline economy is the fastest among all capital cities. Some trends differ by city, which speaks to the individual characteristics of local industry.

 

Nationwide resumption – From “work from home” to “back to the office”

According to JD’s consumption data, the large-scale resumption of work began in early February, when telecommuting was dominant. During that period, sales of conferencing audio and video equipment increased nearly 20 times compared with the same period last year. In mid-February, sales increased by another 47% compared with February 1-10, when growth started to gradually stabilize. In early March, sales increased by 40% compared with early February.

With a large amount of white-collar workers returning to the office, sales of peripheral products (such as keyboard, mouse, etc.) on JD increased by 54% in early March compared with the same period in early February, while the sales of network-related products increased by 57%. While demand for these products peaked in mid-February, and since then demand has gradually stabilized, the demand for peripheral products saw a new round of growth in early March. Sales of computers including laptops increased by 48% in mid-February month-on-month and has stabilized since then.

Demand for car-use portable power banks increased the fastest in mid-February, indicating that many Chinese consumers began to travel by personal car following over 20 days of staying at home. JD’s data also shows that the demand from northern China is generally 40% higher than in southern China.

At the same time, demand for electric lunch boxes peaked in late February with a month-on-month growth rate of 528% in sales.

JD’s data also shows that the demand from northern China is generally 40% higher than in southern China.

 

Work resumption differs by region

As the center of the internet economy, many technology enterprises in Beijing have taken the lead in implementing remote work and video conferencing. In Beijing, the consumption growth rate of telecommunicating-related products month-on-month is higher than the average of nationwide consumption.

Work resumption efficiency in Jiangsu, Zhejiang and Shanghai exceeds that of other regions. For example, sales of office supplies in Hangzhou city, Zhejiang province, increased 94.6% in early March compared with the same period in February. In Nanjing and Suzhou, both in Jiangsu province, sales increased 70% and 50% respectively, surpassing the national average.

As the center of China’s manufacturing industry, the South China/Pearl River Delta Region’s resumption efficiency is also leading in the country with sales of office supplies at the beginning of March more than 50% as compared with the start of February. As JD data shows, in early February, work resumption-related sales had already peaked in Guangzhou and Shenzhen. For example, the growth rates of sales of office services products in Guangzhou and Shenzhen in February reached an all-time high since the epidemic, and the growth rate of most of office supply products month-on-month peaked in mid-February. In March, sales growth has stabilized.

In key cities in southwest China, including Chengdu and Chongqing, sales of cash registers at the beginning of March increased five times, compared with the beginning of February, indicating the fast resumption of physical retail in the region.

Looking at northwest China and taking Xi’an as an example, sales growth of remote work-related items was not as noticeable as in the east of the country. However, requests related to the resumption of business offline continued to increase. It’s worth noting that in the entire city of Xian, sales increase of cash registers used by shops since mid-February compared with the beginning of February reached 48% month-on-month and by 100% month-on-month in the second half of the month, leading the national average.

Northeast China also demonstrated an increased in offline work resumption-related demand. For example, at the beginning of March, there was an eight-fold month-on-month increase in sales of cash registers in Shenyang. In Changchun, electric lunch boxes increased over 80% month-on-month, and in Dalian, telecommunications items increased over 30% month-on-month.

 

Office district consumption increase:

At the same time, JD’s Big Data Research Instituted also specifically looked at key office districts in some cities and found that the month-on-month growth rate of office supplies, offline merchandising related products and services, was significantly higher than the average of 40 cities. In the office districts of eight key cities, Nanjing, Beijing, Shanghai, Shenzhen, Suzhou, Xi’an, Chengdu and Chongqing, at the beginning of March, transaction volume month-on-month as compared with the beginning of February for cash registers increased 210%, repair services increased 524%, telecommunications doubled, peripheral products increased 73%, internet related products increased 93% and conference audio and video equipment increased 63%.

Slightly different as compared the trend of the national average data, the consumption growth rate month-on-month of the office districts in the seven cities for 10 days is V-shaped. Consumption peaked in mid-February, and at the end of February grown gradually fell up until the beginning of March where consumption then increased. To a certain extent, this shows that the rate of work resumption at the beginning of March compared with the month of February substantially higher. People also already resumed the habit of picking up delivery parcels at their offices.

People also already resumed the habit of picking up delivery parcels at their offices.

 

Offline economy and remote education demands increase

As one of the key indicators of offline merchandise resumption, cash register sales started to increase from the beginning of February, and at the beginning of March, was 68% higher than that in early February.

In addition, in February, the transaction volume of renovation services increased by 263% month-on-month. At the same time, construction/infrastructure materials increased by 33% month-on-month in mid-February, indicating that many consulted online renovation services and placed orders. It is reported that during the epidemic “JD Home” channel helped designers from Dabanjia, B&Q, Boloni and other well-known high quality design and renovation service merchants provide free online design services to 100,000 families via the JD Live platform. In February, JD Home promoted over 1000 renovation and design live streams.

At the same time, during the epidemic period, JD Home selected 18 “renovation alliance quality merchants”, including numerous offline stores to provide renovation consultation and quotes, with a three-month insurance service. Spring is typically peak season for renovation, and with the gradual alleviation of the epidemic, the full resumption of work in the renovation industry is just around the corner.

Since primary and middle schools across the country resumed classes remotely in early and mid-February, the related consumption also increased earlier. In early-February, transaction volume of laptops and student/education-related laptops increased 77% YOY and 95% YOY respectively. In addition, the education books for young children category under JD books was four times that of the same period last year based on the lunar calendar, handicraft and game related books increased nearly 200% YOY, and preschool education books up nearly 100% YOY.

 

APPENDIX: Definitions:

Office supplies: Fax equipment, printers, computer equipment, computer components, service products (including remote services, anti-virus software, office / computer / education software, extended warranty services, etc.) conference audio and video, toner, projects, network products (including routers, network storage, wireless internet access, switches, etc.) peripheral products (keyboard and mouse, UPS power supply, mobile hard disk, etc.), stationery etc.

Personal travel supplies: Car jump starters, electric lunch boxes, convenience food, raincoats, telecommuncations, etc.

Offline business related: Construction/infrastructure materials, cash registers, decoration services, etc.

 

View the original report in Chinese here.

 

(yuchuan.wang@jd.com; ella@jd.com)

JD Worldwide to Help Brands Turn 1000+ New Products into Hot Sellers

Posted on by Rachel Liu

by Rachel Liu

In 2020, JD.com will help international brands turn over 1,000 new products into hot selling products, and nurture over 3,000 new international brands on the platform.

On March 20th, 2020, JD Worldwide, JD.com’s platform for imported products, held an online conference for merchants and announced that in 2020, JD Worldwide will focus on customer growth, developing third-party business and the nurturing of merchants to help more international brands and merchants grow in China.

 

1000+ hot-selling new products

To introduce more overseas products to JD customers, the nurturing of new brands and merchants will be a focus for JD Worldwide in 2020. Apart from the aforementioned measures, JD Worldwide will help over 100 suppliers to achieve 100 million RMB of sales in 2020. One week of every month will be “JD Worldwide New Product Week”, and will be designated to specifically promote new products.

In 2019, JD Worldwide introduced over 3,000 new brands, and sales of over 1,000 brands more than doubled YOY. On average, more than eight new products were sold on JD Worldwide every minute last year. JD Worldwide has successfully nurtured several new brands in 2019. For example, Korean beauty brand VIDIVICI launched on JD Worldwide in 2018, and during June 18 Sales Festival last year, sales of the brand ranked No.2 among all new products on JD Worldwide. During the 2019 Singles Day Shopping Festival, sales of VIDIVICI increased over 30 times YOY. Behind the rapid growth of the brand is JD Worldwide’s comprehensive suggestions based on JD’s big data, covering brand positioning, pricing, package designing and marketing strategy.

 

Customer growth

JD Worldwide’s customer growth in 2019 has shown great potential. JD Worldwide customers have been shown to have greater consumption ability, and the platform has more young consumers and consumers from lower-tier cities than in previous years.

In 2020, JD Worldwide will leverage its marketing and operations capabilities as well as premium customer service to boost customer growth. The recently launched “Imported Products Day” campaign on the 15th of each month is a good example of how JD Worldwide can provide better customer experience through marketing. During the past two events in February and March, sales of JD Worldwide have more than doubled YOY.

 

More support to merchants

Healthy development of merchants is essential for building a platform with rich and diverse choices for customers. In 2020, JD Worldwide will focus on building a healthy ecosystem for merchants. It will launch a more comprehensive after-sale service system and provide special support for merchants that use JD’s fulfillment services.

During COVID-19, JD’s international supply chain system and continuous logistics service has enabled those merchants to continuously supply their products to customers, and some merchants have seen sales increased by over 90%. Now JD has over 1,000 international transportation routes to support overseas merchants.JD’s strong supply chain capabilities have enabled overseas merchants to deliver their products to customers quickly.

 

(liuchang61@jd.com)