JD and Fung Retailing Fuel O2O Race with AI Research Center

03/02/2018

JD.com and Hong Kong’s Fung Retailing signed an agreement on Friday to develop AI-driven brick-and-mortar stores – the latest move in the smart retail race. Fung Retailing is part of Fung Group, a trading, supply chain management, and retail company, and oversees a whopping 3,000 stores in Hong Kong and abroad. JD.com is China’s largest online retailer. This combination of a massive offline retail footprint and significant online customer base holds the potential to become a stronghold in the O2O arena.

In a public statement, Bowen Zhou, Vice President and Head of the AI and Research Division at JD.com said, “As one of the largest retailers in the world, we believe that figuring out how to deploy AI solutions is critical to our future success. Drawing on Fung Retailing’s global offline retail expertise, this partnership will be important for us as we deliver our retail vision.”

The push to integrate AI into retail experiences is well underway. And per usual, it seems that every initiative appears in twos – one initiative by Alibaba and one by Tencent, in no particular order. Tencent, the top shareholder of JD.com recently opened its own artificial intelligence research center in Shenzhen. In January, Alibaba announced that its deep learning AI brain scored higher on a reading test than humans. Additionally, Tencent’s Shanghai smart pop-up store WeLife followed Alibaba’s smart pop-up store debut during 2017 shopping festival, Singles Day.

Fung Retailing and JD reported that developing unmanned stores, smart shopping assistants, and virtual clothes fitting are technologies on the top of its R&D list. The duo also plans to build a comprehensive AI retail solution that integrates online and offline shopping platforms while automating the supply chain, pricing, storage, ordering and payment aspects of retail.

Managing Director of Fung Retailing, Sabrina Fung, said in a statement to the South China Morning Post, “when it comes to the future of retail, and driving the customer experience, AI is an essential component. Across our retail portfolio, AI is a focal point and this cooperation with JD will, without doubt, accelerate our progress.”

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