JD.com might be based in China, but its brain is in Silicon Valley
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JD.com might be based in China, but its brain is in Silicon Valley

Chinese Ecommerce giant JD.com, second only to Alibaba when it comes to online retailing in the country, is looking far afield for inspiration – all the way, in fact, to Silicon Valley.

JD.com doesn’t sell in the U.S., but it’s maintained a research and development laboratory in America’s technology capital for the past two years. The company created it with the intention of gaining access to top talent and tech startups – in this business, both of these things tend to wind up in Silicon Valley. But can JD.com bring the expertise it gains overseas back to China? And, perhaps more importantly – what is that expertise, exactly?

JD.com’s share price edged up over the last week

graph 0405 jd

SOURCE: Yahoo Finance

The company’s head of robotics research at its Silicon Valley lab, Dr. Hui Cheng, recently spoke to the Associated Press, discussing JD’s artificial intelligence operations, and its focus on China and South East Asia. Some of the most interesting take-outs are below:

According to Cheng, Chinese consumers are “a bit spoiled”. His description of the Ecommerce scene in the country demonstrates quite clearly why the trend is so powerful there: “It's all about free service. Also, they're expecting high-quality products. We can directly deliver to people's doors, a bit different from the U.S. where they just drop it off. Our delivery employees are in charge of certain geographical areas and are very familiar with the customers in those areas. They know when they'll be home. They call when they get there. They're very accommodating.”

Cheng also explained what the company’s direct focus is within Silicon Valley. He said they’ve been testing “indoor and outdoor autonomous deliveries” and robotic arms, as well as “developing state-of-the-art” tech like artificial intelligence and natural language processing.

This last point underscores one of the company’s main interests: social robots. Cheng says the work he does in America is based on answering questions about this nascent tech: “How are they going to be part of the social environment? How are they going to interact with pedestrians? How will they be polite? We don't want them to be considered threatening or dangerous.”

JD may not get its robots to market tomorrow. But it’s quite clear that the company is a fully fledged tech titan in the making – all it has to do now is keep growing, and take its place alongside the biggest names in China: Alibaba, Tencent, and Baidu.

Disclosure

Dominion holds JD.com, as well as Alibaba, Tencent and Baidu, in its Global Trends Ecommerce Fund.


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