Technology is giving China’s retail sector a lead over its global peers, says JD.com vice president
Technology and innovation have transformed China’s retail space — and that’s what sets the sector apart from the rest of the world, according to a senior executive at JD.com.
Innovation in the domestic retail industry has led to newer ways for businesses to sell their products to consumers, including via online and offline channels and over social networks, Ling Chenkai, vice president at JD.com, told CNBC’s Eunice Yoon during a fireside chat at the East Tech West conference held in the Nansha district of Guangzhou, China.
“The retail infrastructure during the past couple of years have improved a lot, I think the retail infrastructure is really leading the world,” Ling said. He explained that China has adopted advanced technologies including artificial intelligence, the study of large volumes of data and blockchain in the retail sector. That has led to the development of new types of unmanned convenience stores popping up in China — where customers check out items on their own, and where facial recognition and electronic price tags are used.
Ling predicted that there will other types of developments happening in the future.
JD.com competes aggressively with Jack Ma’s Alibaba in China’s massive e-commerce space and has the backing of prominent global and local names such as Google and Tencent.
Recently, China celebrated a major shopping event called Singles Day where both JD and Alibaba racked up billions of dollars in e-commerce sales. The spending habits of Chinese consumers have attracted many Western brands, including luxury names, to sell in China.
Also speaking to CNBC at the fireside chat was Jun Yang, co-founder and chief technology officer of Dada-JD Daojia, a Chinese online grocery and delivery firm, which is partly owned by JD.com.
Yang said he strongly believed that China’s e-commerce market will grow further as more consumers shop online.
“I project that within five years, for all the existing retailers like Walmart and Carrefour in China, 50 percent of their sales will be online, will be providing one-hour e-commerce shopping experience,” he said.
Relatively strong economic growth and a rising middle class in China has resulted in customers “getting more and more sophisticated” in their shopping habits, according to JD.com’s Ling. While price used to be the most important factor influencing purchase decisions in the past, customers now value quality, authenticity and customer service just as much, he explained.
Chinese consumers are also considering peer reviews a lot more now before buying certain products, Ling added.
Meanwhile, Yang added that consumers are increasingly favoring one-hour delivery services for products other than perishable goods.
“When we provide the service, people shop not only the perishable goods but all the other stuff … using one-hour service,” he said.