Electronic enthusiasts have eight o'clock in the morning: "When the user experience reaches the extreme, the cost has reached the extreme, and the operational efficiency has reached the limit, which can create more value for our industry, industry, suppliers, brands, consumers. At the time, I believe that our fourth retail revolution will be the ultimate retail revolution."
At today's (July 20) Lenovo Global Innovation Technology Conference (Tech World), Jingdong Group Chairman and CEO Liu Qiangdong (microblogging) for the first time publicly described the core of the fourth retail revolution.
In his view, the nature of retail will not change, it will still be user experience, cost, efficiency; but artificial intelligence technology will re-engineer existing retail, push user experience, cost, efficiency to the extreme and create a huge society value. He also said that Jingdong will be open to empowerment and work with all partners to produce more and better products for consumers, so that technology can become a technology that consumers can perceive and can actually use.
Liu Qiangdong, Chairman and CEO of Jingdong Group, delivered a speech
The following is the excerpt of Liu Qiangdong's speech:Before I officially talked about artificial intelligence to drive the fourth retail revolution, I also hope to share with you the thinking of JD's development over the past decade. Our understanding of retail, why are we going to today?
In the past 13 years, our average annual growth rate has exceeded 140% for 13 consecutive years. People say that the insiders look at the doorways, and the laymen watch the excitement. There are many opinions about Jingdong, but to be honest, there are still very few who really understand us. I think that the original intention of any company is inseparable from the life experience of the founder, especially the social environment and industry environment that it faced in the early stage of the business. What did I see when I started my business? What I saw was Zhongguancun moved a piece of goods between various doors and counters. I saw that the information was very opaque. I saw that there were four or five floors between consumers and manufacturers. I saw hundreds of thousands of logistics companies across the country. Almost every logistics company is a regional small logistics company. At the time of retail, the information was fragmented, the goods were fragmented, the service was fragmented, and almost all were fragmented. China's goods go from the factory to the consumer's home, and the average handling is 7.2 times. Each time it takes a lot of social costs, and it causes loss of goods. Every time it is handled, it will generate inventory and take up time. In particular, there are a lot of product lines like Lenovo. Many products will drop a lot after a few months, so the inventory will cause losses to the whole industry one day.
Jingdong's opportunity to retail: user experience, cost, efficiencyWhat is the chance of Jingdong? When we started our business, whether it was in the e-commerce industry before or during the e-commerce business, the whole Jingdong thinking is how to solve the industry problems I have seen. So we set up three development points. The first one is the user experience. When we put the counter in Zhongguancun, we were the first to mark the price. We didn’t bargain, we never asked the customer whether or not to invoice, because for us, You want invoices and no invoices, the price is the same. We insisted on selling only genuine licensed products and began to establish our own storefront system and retail system. At that time our company was small and one person wrote all the systems. After entering the e-commerce, our development ideas are not much different from those of the year. We are still carrying out the three lines of user experience, cost and efficiency.
JD.com has the lowest operating costs in the circulation chain, whether online or offline. We can compare with any traditional retailer in China. We have reduced the overall operating cost of retail sales by 70%. This is the past. The value of Jingdong for many years. Our manufacturers are still able to make a lot of money from JD. Because we reduce the cost, return the reduced cost to the manufacturer, and let the manufacturers have profits, they can better research and develop their own technology and produce more for consumers. With more quality products, our retailers have more opportunities.
Our core efficiency is the inventory turnover days. The number of products we managed in the library on December 31 last year exceeded 4 million. There are more than 260 kinds of goods in more than 260 inventory centers nationwide. In fact, there are technologies behind them. If you manage, rely on people, whether it is 10,000 or 50,000 people, your entire inventory will be paralyzed. Our current inventory turnover days are about 37 days, while traditional retailers only manage 50,000 SKUs, inventory The turnover days need 60-70 days, our 4 million kinds of goods, this difficulty is not a linear increase difficulty, not 4 million divided by 5,80 times, it is geometric, 8 thousand times or even 80,000 times, but behind us They all solved it with technology. Jingdong has the most complete system in the e-commerce industry. Except for the financial system, which uses Oracle, all other systems are independently developed by the open source system. More than 10,000 R&D personnel are still continually iteratively upgrading our information systems every day.
Remanufacturing retail with artificial intelligence technologyAfter everyone knows the development speed of Jingdong, why is Jingdong doing artificial intelligence today and using robots to propose the fourth retail revolution? That is because we have almost realized the cost and efficiency of operation with traditional technology and traditional methods. Extremely, there is a huge increase that is almost impossible. For example, there are seven times of handling in the past. Now we only have two handlings. All the products like Lenovo are from the factory to our logistics center. The second time is from the Jingdong logistics center to the consumers. Two handling, saving the society a lot of social resources and improving efficiency. Our 4 million product inventory turnover days are about 37 days. According to our internal data, I want to optimize for up to 30 days, but if we do 5 days, 10 days? If we take our two handling How to do it once? So we are now proposing to fully develop technology in the next 12 years, using artificial intelligence and robots to make a re-engineering of the retail industry.
What can technology do? Today we use artificial intelligence technology to sell all products for the next 7 days, 15 days of sales, and even the next 3 months of sales, there are a lot of forecasts every day, including the future supply chain, you have not Very accurate sales forecast, I believe that the efficiency of all suppliers is basically at the top.
How to change the cost? Today, our Beijing distribution staff can deliver 150 parcels per day. This has reached the peak. If the distribution volume increases, the delivery staff is too hard. What should I do? Only use robots to solve it. Let me give you a few examples. The first is our logistics. We have started to build our unmanned warehouses in Beijing. Before the next year, we will realize that there is no employee in the operation site of this unmanned warehouse. All use artificial intelligence + robot technology to achieve unmanned operation. We are developing unmanned trucks. Our unmanned trucks do not emphasize the purpose of autopilot. The most important thing is that it is a mobile distribution station. A large amount of information of unmanned trucks is continuously released to the distribution system. Our drones can solve the problem of high rural logistics costs. In the future, our delivery must be robotic delivery. It is impossible for the brothers to risk the sun, the smog, and all kinds of dangers to go to the street to deliver, and switch to robots. In the next 12 years, I believe that Jingdong has at least a dozen times of growth. Of course, we have a small goal of expecting more than ten times sales growth, while our total number of employees can still maintain the total number today. Everyone thinks about it. If Jingdong’s sales are 12 times or even 20 times higher, and the total number of employees will not increase, if we turn the two handling of goods into one handling, move directly from Lenovo’s factory to consumption. In the home, I believe that by that time, the user experience has reached the limit, the cost has reached the extreme, and the operational efficiency has reached the limit, which can create more for our industry, industry, suppliers, brands, consumers. the value of. So we propose the fourth retail revolution. We believe this is the ultimate retail revolution, and I firmly believe that no matter how the retail industry develops in the future, there is no need to make a breakthrough in this revolution. I believe there will be no fifth time because It has pushed the entire retail industry to the extreme. No matter how the technology develops, unless 3D is truly practical and practical, all goods can be printed. It may not be a revolution in the retail industry, but an upstream and front-end technology.
Artificial intelligence will create huge social valueIn addition to the enormous value that artificial intelligence and robots can bring to our retail industry, it has enormous social value. I can give you an example. We signed a drone agreement with Shaanxi Province and Sichuan Province some time ago. For example, we have to build 150 drone airports in Sichuan. The airport is very small, probably only such a large stage size. The cost of each airport adds up to only 600,000 RMB, which is 100,000 US dollars. However, once completed, we can guarantee that all the wild fruits and high-quality goods scattered in the old forests of Sichuan Province will be sent to the residents of any city in China within 24 hours. In fact, the reason why many remote places in the past were poor is that the logistics cost is too high. Like Sichuan, there are so many delicious and delicious foods. After going out of the mountain, consumers can't afford it at all, mainly logistics. Everyone thinks, if the car is running around in Sichuan, passing fees, oil money, and various expenses, it is unbearable. But drones can connect it. Although our drones can only fly 50 kilometers today, we are building a three-level navigation logistics system to develop longer-end, higher-load models and even fly. It will soon be able to concentrate the goods of the country to Mianyang or Chengdu, and then to Beijing and Shanghai.
Let us give you an example. Jingdong Finance is developing a bit later, but it is because of the late, so we have given us the latest technology to do financial opportunities. Jingdong White Bar everyone knows, give you an example, Jingdong Gold Bar. For example, most people present here can borrow cash from Jingdong, which is equivalent to cash loans. We have dozens of engineers, all of them using artificial intelligence, plus the number of years of data accumulated in the past, which was launched in January 2016. In the month, our external loan amount was 100 million yuan. In December 2016, the loan amounted to more than 5 billion yuan. By June of this year, our monthly cash loan amounted to nearly 10 billion yuan. This 10 billion loan, we did not see any consumers. In the past, there was no offline auditor, no paper contract was signed, no business outlets, no credit points, but since 2016, our accumulated bad debt rate has not increased by more than 0.3%. Knowing this number is very amazing. The average financial institution is about 1%-2%, and we only have 0.3% accumulated. This is the value that technology brings to the financial industry.
In the past, Jingdong did a lot of technology, but our technology is not everyone can perceive. Everyone only knows that the product is fidelity, the service is very good, the user experience is very good, but there is no more perception of technology, I believe that with the application in the future With the continuous accumulation of technology, there will be more and more technologies that front-end consumers can perceive. For example, our smart refrigerators and smart audio systems will provide consumers with more and better smart products in the future.
Therefore, I think that in the past thousands of years, technology has been promoting social progress and truly changing the core elements of society. Today, I am very honored to be able to discuss the future technology with you here. I hope that all of our partners can continue to support Jingdong as in the past. Everyone works hard to produce more and better products for consumers, so that our technology will become an early one. A technology that consumers can perceive and can actually use. thank you all!
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