Chinese ecommerce giant JD.com to form IoT and ecommerce lab
JD.com, Alibaba competitor and one of China’s pre-eminent online retailers, has partnered with hardware company Zebra to create the IoT + E-commerce Logistics Lab, which will work on applications of the Internet of Things in online retail.
The partnership also involves Digital China, an IT company focused on providing digital solutions for a range of businesses, and one of China’s largest IT solutions providers. The collaboration between the heavy hitters in tech and ecommerce will look to streamline JD.com’s back-end and supply chain processes with technology generally considered crafted in service to consumers.
“As JD.com competes with Tmall to attract more brands to sign up, one of the major selling points it uses to differentiate itself from Alibaba is its logistics infrastructure,” said Liz Flora, editor of Asia Pacific research at L2. “JD.com has placed significant emphasis on making the case to brands that with its own logistics network, it can deliver packages faster and more reliably than competitors.
“Alibaba is working hard to compete in this arena with its logistics service provider Cainiao.”
Internet of Things
The creation of the lab could prove to be a watershed moment for the existing partnership between the three entities. Zebra and Digital China have already been providing JD.com with transport and logistics solutions including barcode printers, mobile devices and barcode scanners in its warehouses and order fulfillment chain to give them real-time visibility into their operations.
The joint research lab is established for the purposes of creating a practical scientific research platform to bring together the best practices, resources and talents in logistics management, data collection, mobile computing, machine vision, cloud computing and IoT.
The R&D facility will enable the partners to carry out research and development, prototype implementation, test and evaluation, and application demonstrations, leading to the development of next-generation logistics solutions.
The lab will look to enable JD.com to harness technologies and solutions to augment its logistics services, as well as streamlining its supply chain management. A press release claims that the key areas of research for this year will be “to help JD.com improve the productivity of its current picking and packaging operations using mobile devices; increase the visibility of the tens of thousands of trays and cage trolleys used in JD.com’s operations; and to seek potential of applications of machine vision and data analytics in the logistics industry.”
Such a decision to partner on back-end and supply chain solutions only makes headlines if the stakes are high, and indeed they are in Chinese large-scale ecommerce, where a bevy of competitors are gunning for Alibaba’s throne. Even if the IoT partnership produces a small increase in efficiency for JD.com, the dividends can be huge.
Last year, as a part of its Global Shopping Festival, Alibaba celebrated a massive boon of over $7 billion gross merchandise volume (GMV), all settled through its Alipay payment platform, and with the majority of GMV garnered via mobile (see story).
“JD.com’s decision to partner with Zebra Technologies is likely part of an effort to show brands that it’s staying ahead of the curve on logistics,” Ms. Flora said. “With ecommerce spreading across such a massive country to increasingly remote areas, mastery of delivery logistics will be crucial for online retailers’ success.”