Apr 7, 2020|
Seize the Opportunities that the “New Infrastructure” Provides
by Lei Xu
Accelerating the development of the “new infrastructure” – including the deployment of 5G networks and data centers – has become a top priority for China’s central government. Industry experts and academia have now shifted focus accordingly, and it is clearly the time to move in-step with this overall development focus.
Since the outbreak of COVID-19, the “new infrastructure” has played a critical role in China’s overall economy. Retail platforms forged on the basis of a solid supply chain ensure that the supply of product accurately matches people’s needs. Dependable and fast delivery helps guarantee the stability of tens of millions of families. Offline retail stores are exploring online sales opportunities, which accelerates the recovery of production and order life cycle. Meanwhile, online medical counseling and online pharmacies provide convenient “Internet + medicine” services, addressing medical resource shortages. The general public can deeply sense that economic and social operations have not shut down because of times of increased isolation. An important factor for this is simply enabling support of the new infrastructure: technologies including 5G network, data centers, artificial intelligence, industrial Internet, Internet of things and so on.
Aligning with the core direction of this “new infrastructure” already over the past few years, JD.com has continuously upgraded core competencies including “smart supply chain and smart logistics”, which are based on robust technology, such as the Internet of Things, big data and artificial intelligence. These also work together to ensure continued progress and stability of the economy and society during COVID-19. During Chinese New Year, this “new infrastructure” became very real in the hearts and minds of people from across China. Under quarantine, they experienced the efficiency of delivery of medical materials, logistics, distribution as well as the guaranteed supply of fresh food and the availability of products which would otherwise be unsalable due to our smart supply and smart logistics. And, now people are able to get back to work. This infrastructure ensures economic resilience and forms a hedge against the impact of the pandemic. Smart supply chain and smart logistics – like hydropower and coal in the past – will become just as indispensable to modernity tomorrow.
The quality of one’s supply chain is increasingly relevant around the world, and it’s a lynchpin for cooperation and development across a range of industries and enterprises. Whether it’s in the midst of crisis such as COVID-19 or during every-day life, the upgrading of China’s economy to be more focused on smart manufacturing and smart services is inextricably linked to supply chain and smart logistics. If we can significantly reduce the cost of social logistics through smart supply chain and smart logistics, overall economic and social development will be much more efficient and greatly improved. In the process of accelerating the development of new infrastructure, actively developing smart logistics and an intelligent supply chain will be critical.
The “new infrastructure” is also applicable to potential consumption, new models of production in a variety of industries and even rapid economic development. This is the smart and digital foundation of quality economic development which gives rise to new models, new business types and new services. It opens up a broad space for new manufacturing, new services and new consumption. Building a new type of infrastructure acts as a ‘seed project’ for China’s future economy. It will act as a driver of economic momentum which will both move enterprises higher as well as help them cope with challenges related to transformation and upgrading. At the same time, we need to recognize that there are no shortcuts to the new infrastructure. It can be achieved only through perseverance and endurance.
The impact of COVID-19 on China’s economy is temporary, and the fundamentals of stable and long-term improvement will remain unchanged. The opportunity that the new infrastructure affords can only be secured by adopting a flexible and open-minded approach. But, those who do so will enjoy the dividends for themselves and all of society.
（The author is CEO of JD Retail. The Chinese version of this article was published on People’s Daily, April 3, 2020）
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 Health CEO Tells AP TV about the “Largest Hospital in the World”
