Beijing: E-commerce has changed the face of retail. A drone can handle delivery, and payments and orders are all done with a smartphone.
These changes are now coming to South East Asia, said an executive of a prominent Chinese retailer.
Gloria Li, Corporate Vice President of JD.com, which is described as the largest retailer in the online and offline space, believes “after several years [from now], the penetration of e-commerce in South East Asia market will increase.”
The expected increase is due to two facts — customer behaviour and the efficiency of the e-commerce, she said during a meeting with a group of visiting media representative recently to Beijing.
First, the young generation is “gradually getting everything from the internet … Secondly, we are seeing more efficiency in e-commerce versus traditional retail because e-commerce has no boundary. You can access products from either phone or iPad, or PC or, sometimes, smart hardware like a smart refrigerator,” she said.
JD.com in China is an example of the “amazing speed” of the growth of e-commerce.
Its 2017 revenues were estimated at $55.7 billion (Dh. 205 billion), recording a 40 per cent increase from the previous year, Li said.
The company, which started 15 years ago, has today 500 warehouses across China, 301.8 million customers, and 82 per cent of them are ordering via mobile.
Two years ago, the company started delivering products through drones, particularly in rural areas. It has other methods such as robots too.
Today, it is the third largest internet company globally after Amazon and Alphabet, according to the company.
JD.Com, which was listed on Nasdaq in 2014, started expanding beyond China two years ago. It first reached Indonesia, which was quite similar to what the Chinese market looked like a few years ago, Li said. The Chinese retail company then began doing business in Thailand and in Vietnam, she said.
Delivery using drones does not only depends on technology, but also on laws and policies in other countries, said Li. “We have not entered the ME market yet. It is a very young company,” she said of JD.com.
“At the same time, we are also seeking opportunities to outreach other markets in the world in the future, like Europe, US, and maybe Africa,” said Li in the interview conducted in the company’s headquarters in the Chinese capital.
In the company headquarters, JD.com offers customers the opportunity to buy by themselves from stores and display areas. There is a store for different products, including electronics, cosmetics, and accessories.
There is also a mini supermarket, where entry is allowed using the mobile phone. Cameras located on the ceiling of the small grocery follows the customer and registers the picked up items. At the exit, the money charged using the personal information used for the phone number, and no cash or credit cards are used.
Commenting on the security procedures against any hacking or piracy, Li said “we have a dedicated team focusing on security and data privacy. This is the most important thing for the customer”.
During the purchase process, the cameras follows a certain feature of the buyer, such as the colour of the cap or jacket, while the personal information kept private in the system, she explained.
The JD.com executive refuted the claim that technology is eliminating humans’ opportunities for work.
“When the company started 15 years ago, it had 38 people. Now, it has 170,000 people. This shows that we recruit on an average 10,000 a year.”
Human workforce is needed for many tasks such as delivery, monitoring and tracking orders at the warehouses. Humans direct robots, she said.
Key facts about JD.com:
■ Covers 99 per cent of China’s population
■ Can deliver over 90 per cent of orders same-day or next day
■ Leverages a network of over 500 warehouses with a total of 10.9 million square meters
■ Nearly 7,000 delivery stations and pick up stations.
■ Fastest-growing categories are home appliances, fashion, food and beverages, and baby and maternity.