JD.com adopts AI to drive growth in small cities, among female users as ecommerce slows

Chinese ecommerce giant JD.com is exploiting artificial intelligence to help drive online consumption in smaller cities and among female users to help compensate for slowing growth in China’s ecommerce industry amid the uncertain economic climate.

JD’s automated sorting center in Kunshan. Photo credit: JD.

Zhou Bowen, head of AI at JD.com, said the company’s AI-powered SnapShop, which allows users to take a photo of a product and provide identical and similar product recommendations, is helping it grow business in smaller cities and among young female consumers of fashion and beauty products, all of which are growth markets for JD.com.

“Seeking growth in these categories is in line with JD’s company strategy,” Zhou said in an interview on Tuesday at the Rise tech conference in Hong Kong. “We are using AI technology to penetrate these markets.”

JD is using AI across the entire purchasing process on its shopping platform, from product search and personalized recommendations to customer-service chatbots and product delivery, according to Zhou.

Chinese ecommerce giants like JD, as well as its rivals Alibaba Group Holding, which owns the South China Morning Post, and Pinduoduo, are sharpening their technologies and seeking opportunities among consumers in the country’s smaller cities to help boost consumption amid a marked slowdown in ecommerce sales from consumers in the biggest cities like Beijing, Shanghai, Guangzhou and Shenzhen.

About 5% of consumers in China’s 400 emerging lower-tier cities already have the same income as that of an average American consumer, according to a report by Shanghai-based marketing firm AgencyChina. Lower-tier cities are expected to fuel two-thirds of the growth in national consumption from 2017 to 2030, according to estimates by Morgan Stanley.

Zhou, who joined the ecommerce operator in September 2017 from IBM, reports directly to JD founder Richard Liu Qiangdong, who last year said AI was a core component in the company’s business strategy after its investment in technology development reached 12.1 billion yuan (US$1.75 billion), up 82% year on year.

However, JD is relatively late to the AI game and has to compete globally for talent with the likes of Google parent firm Alphabet and Baidu, China’s leading search engine operator. Yet JD has been on an AI hiring spree since Zhou joined the company. In short succession since early 2018, it recruited Pei Jian, a leading big data researcher and computer science professor at Simon Fraser University in Canada, as well as former Amazon chief scientist Bo Liefeng, and former Microsoft Asia-Pacific technology chairman Shen Yuanqing.

“The talent flow is helpful on technology innovation. I think China is now quite attractive to AI talent as it values them a lot and is doing quite well in providing scenarios for AI technology application,” said Zhou, who last August launched JD’s AI accelerator as an incubator for AI startups and early-stage companies.

“We are most interested in AI companies that have deep understanding in specific industries and provide good AI solutions to the problems. Most of them have already finished their A-round funding,” Zhou said.

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