JD.com adopts AI to drive growth in smaller cities and among female users amid wider e-commerce slowdown
- The company’s investment in technology development rose 82 per cent last year to US$1.75 billion
Chinese e-commerce giant JD.com is exploiting artificial intelligence (AI) to help drive online consumption in smaller cities and among female users to help compensate for slowing growth in China’s e-commerce industry amid the uncertain economic climate.
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.com is using AI across the entire purchasing process on its shopping platform, from product search and personalised recommendations to customer-service chatbots and product delivery, according to Zhou.
Chinese e-commerce giants like JD.com, 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 e-commerce sales from consumers in the biggest cities like Beijing, Shanghai, Guangzhou and Shenzhen.
About 5 per cent 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.