Big data, AI set to help improve user experience

A JD's drone delivers online purchases in the rural areas of Xi'an, Shaanxi province, on Nov 10, 2016. [Photo provided to China Daily]

Big data and artificial intelligence are driving the development of China's e-commerce giant JD.com Inc, and are expected to help the company provide better user experience, reduce costs and improve efficiency.

Zhang Chen, chief technology officer at JD, said: "China is far ahead of other countries in the use of mobile internet. Now mobile internet usage also exceeds PC use, which indicates users' changing habits. So we need to figure out the users' real needs.

"So, to better serve consumers, we must dig deeper into big data. And big data really helps JD become better, especially in intelligent pricing and the supply-chain areas."

According to Zhang, pricing is influenced by various factors, including competitors, inventory and season.

"Reasonable pricing promotes sales. But we need to maintain profits and also increase the sales volume. Machine learning can help us forecast sales, do dynamic pricing and replenish stocks automatically."

The company has also introduced the concept of a mobile store.

Based on an analysis of consumer demand and where they live, using big data, JD can deliver items to users using nearby distribution stations even before they place orders.

Zhang noted that while it took 13 minutes for the first customer to receive his ordered iPhone 6 in 2014, when it came to the iPhone 7 this year, it arrived within 4 minutes.

Data from iResearch Consulting Group show that the second-quarter online sales amounted to 4.6 trillion yuan ($671 billion) in China, a year-on-year growth of 21.6 percent.

Meanwhile, the rapid development of the market has let JD, Taobao and other online-shopping platforms accumulate a huge amount of consumption data.

And Dong Xu, an internet-market researcher at Beijing-based market-research company Analysys, said that, as digital users increasingly become crucial assets, companies have to analyze the assets' value and use big data to increase revenue and avoid risks.

"As a representative of e-commerce platforms, JD.com is using big data and other technologies to improve the operating efficiency of the systems in terms of the supply chain, service, pricing and logistics. This is the future trend," he said.

Separately, JD has been operating drones in four provinces in China and is expected to use them to deliver online purchases along more than 100 routes by the end of next year, said Zhang.

"With the help of drones, consumers in rural areas will be able to enjoy the benefits and convenience of online shopping. Drones will also reduce costs as we independently develop core technologies," he added.