Here's everything you need to know about JDL and its market debut.
WHAT DOES JDL DO?As the name suggests, JDL is the shipping and delivery arm of JD.com, China's second-largest ecommerce company after Alibaba. JD, listed on Nasdaq, is currently valued at over $160 billion.
JDL is a spin-off that began as JD's in-house logistics department in 2007, with its operations consolidated into a wholly owned subsidiary in 2011. Since 2017, it's made its services available to other companies besides parent JD and is betting that "as supply chain demands become increasingly sophisticated, more companies are expected to outsource their supply chain operations to third parties that can provide comprehensive supply chain solutions and logistics services," according to its offering prospectus.
JDL will be JD's third spinoff. JD Health raised $3.5 billion in a Hong Kong IPO in December 2020 and JD Digits, its finance unit, is planning an IPO in Shanghai, although it has been reorganizing itself to avoid running afoul of regulators as Ant Financial did in the run-up to its planned public offering.
JDL says it has over 800 warehouses and employs over 240,000 workers in delivery, warehouse and customer service roles. Its stated goal: "To become the world's" -- not just China's -- "most trusted supply chain solutions and logistics services provider." It's already known for its logistics prowess; many items delivered via JD allow buyers to specify the precise hour of doorstep delivery, so investors are unlikely to need a hard sell.
WHAT'S NEXT FOR JDLJDL plans to use the proceeds of the offering to broaden its warehouse network and trick them out with more "smart" tech, strengthen its line-haul network, upgrade its cold-chain network to keep up with online demand for fresh foods and pharmaceuticals and bolster its cross-border network, partly because "demands from Chinese consumers for foreign products continue to remain robust."
JDL expects Chinese logistics spending to reach nearly $3 trillion by 2025, the highest in the world, partly due to "redundant logistics processes" that the company hopes to streamline. The integrated supply chain logistics market involves everything from express and last-mile delivery, to trucking and warehousing, to add-on services such as home installation and after-sale services, according to JDL. But it thinks that market is "highly fragmented" and sees a chance to become the logistics firm to rule them all.
Its secret weapon: tech. Its IPO prospectus mentions automated guided vehicles, autonomous mobile robots, sorting robots and self-driving vehicles, among other things, which will deliver "critical improvements in speed, accuracy and productivity in all key logistical operations." This includes a fully unmanned warehouse in Shanghai, already in operation. And the company will be guided by data to "gain a more comprehensive understanding of the sources of inefficiencies."
JDL's FINANCIALSJDL doesn't make a profit, but the trend lines are good. Revenue's rising quickly: It grew 31.6% between 2018 and 2019, from about $5.8 billion to about $7.7 billion. From 2019 to 2020, revenue for the first nine months of the year jumped 43.2%, from about $5.3 billion to about $7.6 billion. Net losses were about $340 million in 2019, and only $1.8 million over the first nine months of 2020.
The company has previously been criticized by both commentators and JD CEO Richard Liu for bleeding cash. Chinese financial outlet Caixin reported Wednesday that Liu had "[written] in an internal email to [JD's] delivery leg in mid 2019 that the financing could only support JD Logistics' operation for two years if the company kept losing money." JDL's previous CEO, Wang Zhenhui, was ousted in December and replaced by Yu Rui, who had been the head of JD's Human Resources department.
JDL isn't promising a quick path to profitability, instead focusing on improving its competitive position. "Our costs and expenses will likely increase in the future as we expect to expand our logistics infrastructure, enhance our supply chain capabilities, develop and launch new solutions and service offerings, expand customer base in existing market and penetrate into new markets, and continue to invest and innovate in our technological platform," the prospectus says. "Any of these efforts may incur significant capital investment and operating expenses, and take time to achieve profitability."
But JDL spent only 2.9% of its revenue on research and development in the first nine months of 2020, down from 4% in 2018, suggesting JDL is far from a pure tech play.
WHAT COULD GO WRONG?A bet on JDL is a bet on China's continued economic growth, growing consumer demand, digitization of commerce and deepening penetration of broadband and mobile internet. If these trends reverse, JDL -- and many other Chinese companies, not to mention the global economy -- is in trouble.
JDL also flags its relationship with its parent as a possible concern. JD's the source of most of JDL's revenue - 56.6% in the first nine months of 2020, down from 61.6% in 2019 - and its ties with JD may prevent JDL from doing business with JD's direct competitors. What happens to JD and even CEO Richard Liu (Liu Qiang Dong ) reputationally will also affect JDL. (One example: In August 2018, Liu was arrested on a rape allegation while on a business trip in Minnesota. Prosecutors declined to charge him, and he later faced a civil lawsuit in a Minnesota court.)
Then there's the perpetual risk of intense competition. In the integrated logistics arena, this could come from the industry trend toward consolidation, which could mint new or bigger competitors than currently exist on the landscape.
WHO GETS RICH?Here's what we know from the prospectus:
As the Series A reportedly valued JDL at $13.5 billion, Eastar and Hillhouse stand to roughly triple their money upon the IPO.
Other investors include entities controlled by Tencent, Sequoia China and China Merchants Bank.
WHAT PEOPLE ARE SAYINGIn response to elevated demand, businesses are doubling down on adoption to boost innovation, improve customer service and automate routine tasks so employees can focus on more strategic work.
International Data Corp. predicts that global spending on AI will double in the next four years, reaching $110 billion by 2024; meanwhile, Gartner expects that organizations will be able to run 25% more tasks autonomously by 2023.
In addition to customers, we're in the early stages of realizing the full potential of how automation and AI can unlock the magic of happier, more fulfilled employees. Despite the need for speed and productivity, humans will always be front and center when it comes to automation. After all, there are some things computers cannot do, like delight customers and build meaningful relationships. Automation can free employees from the hand-cramping, repetitive work they dread, and instead amplify efficiency, insight and skill sets.
Automation, itself, has existed for decades. For years, programmers have been using business rules to tell a system what to do, thus reducing the need for human intervention and errors. AI, on the other hand, uses algorithms to simulate how the human brain works by performing astonishing feats of pattern recognition at scale. Its' usage has been amplified as AI tools have become more ubiquitous, affordable and capable of solving specific business problems.
Automation and AI go together like peanut butter and chocolate - they're just better together. This is proved by the fact that AI without automation is meaningless because you need to connect insights to action in order to see value. AI accurately interprets what customers need, and automation executes on those insights. Together, this pair of transformative technologies can solve numerous problems that neither can tackle on its own.
Today, we continue to see a true need for intelligent automation. But, what does that really look like in practice? Here are some examples of this transformative duo together:
When the pandemic hit, companies like Sun Basket faced a sudden 50% spike in case volume and needed to quickly adapt their customer service. The company turned to AI-powered chatbots to manage the influx of customer requests to help customers track their orders or packages, report issues and get credits or refunds. Then, if customers needed additional support from an agent, the chatbot was able to create a follow-up action for the agent with the customer's preferred method of engagement.
Another example can be found with agencies that handle unemployment claims in numerous states, which also turned to AI-powered chatbots to manage a crush of claims amid the pandemic. With application volumes spiking throughout 2020, only by adopting intelligent automation features could unemployment offices meet the urgent needs of constituents. For example, the New Mexico Department of Workforce Solutions operates a chatbot called Olivia that supports its team of customer service agents. Olivia has managed roughly 100,000 interactions to quickly answer frequently asked unemployment questions.
AI-powered recommendations are also an example of where insights lead to action to help supercharge productivity. For example, IT departments now support an increasingly remote workforce. AI-powered recommendations are applied to support tickets (i.e. a request for new equipment) to efficiently analyze historical data to predict which type of equipment to deploy based on a user's parameters and needs. Then, by using an automated workflow, the item is quickly shipped, while at the same time updating the inventory in the system.
Together, intelligent automation frees up employees to do what humans do best - make decisions and build relationships.
Every day I talk with businesses that are under pressure to do more with less - they can't just hire more people to gain a competitive advantage.
Take sales, for example. A recent State of Sales Report found that 76% of sales teams that use AI say the technology has become more valuable since the pandemic, while top-performing companies adopt AI at nearly three times the rate of underperformers. This is a great example of humans working with intelligent automation.
Humans are uniquely capable of managing relationships, while AI is great at synthesizing lots of information and extracting relevant insights.
More specifically, a feature like Einstein Call Coaching gives sales teams the ability to see insights, key moments and trends that are surfaced within conversational data to understand what's going on in customer calls. Creating a workflow that automatically integrates those insights into action saves salespeople time and sets them up to make better decisions and use their skills more effectively.
Likewise, a customer service agent has the unique ability to empathize with customers and build rapport. By introducing automation at the beginning of the interaction, a chatbot is able to handle the time-consuming, routine requests like updating an address or resetting a password. This frees up the agent to focus on more complicated cases. By integrating intelligence into the employee experience, customer service agents can then see relevant next best actions, such as offering a rebate based on the lifetime value of the customer, in real-time. Agents can then focus on customer engagement and creative problem-solving.
Automation doesn't have to be intimidating. For those just getting started with AI, automation or a combination of the two, here are some tips:
We are all crunched for time these days, whether jumping from one meeting to the next, or crashing your child's Zoom classroom presentation between meetings. Despite how far technology has come, we humans are still the best at creative problem-solving and handling the unexpected. Intelligent automation is well-suited to handle the repetitive, time-consuming work that we don't typically relish.
Now is the time to invest in customer relationships, while empowering employees and increasing their workplace satisfaction. After all, we could all use our own personal assistant working behind-the-scenes.
Keep Reading Show less John Kucera, Salesforce John Kucera is Senior Vice President of Product Management for Einstein Automate. He is responsible for Einstein Chatbots, Flow, and Einstein Next Best Action. John also drives the Einstein Automate vision across the Salesforce Platform, Mulesoft, and Salesforce Industries, enabling end-to-end automation, integrated across any system. John earned his BS in Electrical Engineering at Northwestern University, and his MBA in Business at Stanford Graduate School of Business. Connect with John on Twitter, @NotHackedJK or Linkedin, John Kucera. sponsored Protocol | China More women are joining China's tech elite, but 'Wolf Culture' isn't going away [DEL::DEL]It turns out getting rid of misogyny in Chinese tech isn't just a numbers game. Chinese tech companies that claim to value female empowerment may act differently behind closed doors. Photo: Qilai Shen/Getty Images January 27, 2021 Shen Lu Shen Lu is a Reporter with Protocol | China. She has spent six years covering China from inside and outside its borders. Previously, she was a fellow at Asia Society's ChinaFile and a Beijing-based producer for CNN. Her writing has appeared in Foreign Policy, The New York Times and POLITICO, among other publications. Shen Lu is a founding member of Chinese Storytellers, a community serving and elevating Chinese professionals in the global media industry. January 27, 2021 A woman we'll call Fan had heard about the men of Alibaba before she joined its high-profile affiliate about three years ago. Some of them were "greasy," she said, to use a Chinese term often describing middle-aged men with poor boundaries. Fan tells Protocol that lewd conversations were omnipresent at team meetings and private events, and even women would feel compelled to crack off-color jokes in front of the men. Some male supervisors treated younger female colleagues like personal assistants. Within six months, despite the cachet the lucrative job carried, Fan wanted to quit. A woman we'll call Zhang had a similar experience at her former employer, Baidu. She told Protocol that senior colleagues joked that Zhang and her younger female coworkers were hired to "please their eyes."Alibaba and Baidu look and act like they value female empowerment. Alibaba, the ecommerce giant, hosts a Global Conference on Women and Entrepreneurship every year. Its founder, Jack Ma, has positioned himself as a champion for women and has repeatedly said that Alibaba owes its success to its female workers. Ma has touted the company's relatively hefty share of women in top management -- currently, six out of 14 of the most senior roles are staffed by women. Search engine behemoth Baidu, too, likes to tout its relatively high ratio -- 46% -- of women in management.
"Workplace equality is a core value of Baidu. Female employees account for 43% of Baidu's workforce and 46% of management. Women play significant roles as top executives of the company driving technology innovation and strategy," Baidu said in an email reply. Alibaba did not respond to Protocol's requests for comment.
So why do women like Fan and Zhang have such a rough go of it?
This is the terrible paradox at the heart of Chinese tech, one that will threaten its capacity to innovate in the future. A wave of Chinese women are joining elite tech companies and their boardrooms, often in numbers that compare favorably to tech industries abroad, but it turns out that getting rid of sexism is far more than a numbers game. Women in Chinese tech are marginalized, demoralized and exhausted. When they get home, they're still expected to shoulder most of the childcare and household chores.
The result: Those who manage to ascend have to learn to play -- and win -- a man's game. This paradox is going to sharpen as more women enter tech and become aware of gender inequality.
Women are increasingly populating Chinese tech offices. Data shows that some of China's biggest internet companies, including ByteDance, Baidu and ride-hailing giant Didi Chuxing , each employ at least 40% female staff. By way of comparison, statistics show that female employees fill between 28% and 42% of roles at America's five largest tech companies. In India, women make up 34% of the tech workforce; in the U.K., the figure is 19%.
Women have also made it into Chinese tech leadership. Seventy percent of Chinese startups have at least one female executive, a higher proportion than companies in the U.S., U.K. and Canada, according to a 2019 survey conducted by Silicon Valley Bank. And more than 1,000 women have made it into the boardrooms of China's public tech companies, according to a study conducted by Tianyancha, a data technology service company.
Yet Alibaba and Baidu are not the only "greasy" companies. Leading Chinese tech firms, including Tencent, have posted job ads depicting their female employees as "pretty" or "goddesses" to attract male candidates, according to a 2018 Human Rights Watch report. In 2017, WeChat's parent company Tencent apologized after footage emerged of a corporate event where female employees were kneeling while using their teeth to open water bottles placed between men's legs. A 2012 job ad for food-delivery group Meituan declared that "finding a job equals finding a woman," featuring a suggestive image of a thong hanging between a woman's legs. "Do what you most want to do," the ad concluded, using a verb for "do" that colloquially means "fuck." In the years since, Meituan has repeatedly depicted young women in its promotional ads as food on the plate for delivery.
In gender studies, the theory of critical mass hypothesizes that deliberative bodies must be made up of at least 30% women to impact policymaking. But at least when it comes to tech, it's clear that neither a high percentage of female execs nor a workforce approaching gender parity equate to workplace equality. Julie Yujie Chen, who teaches at the University of Toronto and has researched the experience of Chinese women in tech, doesn't believe the presence of more women executives in a Chinese tech company will work in favor of female employees. "Women in tech is not a representation issue," she told Protocol. "It is about challenging the norms."
Lin Zhang, an assistant professor at the University of New Hampshire who has interviewed dozens of female entrepreneurs in China's tech companies, said many of the women who thrive in this ultra-competitive, male-dominated industry not only have become resigned to workplace masculinity and sexism, but have internalized it. "Because of the generally hostile gender culture in China, there's not much solidarity among women," Zhang said. "Now that they're up there, they feel like, 'I have paid my dues. It's your turn.'"
Alibaba's Fan echoes this: "Although women are much present in Alibaba's senior management, they all have transformed themselves to be greasier than the men. That's how they entered that powerful circle."
Shi is a 30-year-old manager of a content-producing team at Nasdaq-listed video-sharing platform Bilibili. Like Fan and the other female tech workers interviewed for this story, she spoke to Protocol on the condition that she be identified by a pseudonym to avoid retaliation from her employer. Shi said the women in her company leadership "completely subscribe to the 'wolf' mentality. They are just as territorial, aggressive and exploitative as the men."
One result is tech products that objectify women and reinforce gender stereotypes, at least in the way they are marketed and used. Didi Chuxing is helmed by a woman -- company president Jean Liu -- and Didi's staff was 40% female in 2017, the most recent year for which statistics are available. However, it encountered scandal with Hitch, a carpooling service launched in 2015 that suggested hookups between drivers and passengers in its 2018 ads. Two female Hitch passengers were raped and killed that same year. The general manager at Hitch was a woman named Huang Jieli.
Even relatively "woke" Chinese companies demand a lot of their employees. A major culprit is Chinese tech's infamous 996 work schedule -- 9 a.m. to 9 p.m., six days per week -- which can wear workers down. I spoke with most interviewees after 10 p.m. in China, after they had finished a long day's work. Message alerts from colleagues often interrupted our conversations.
This work culture further disadvantages women because of the larger milieu in which they live. Women still shoulder most of the childcare and housework burden in Chinese households. A 2019 National Bureau of Statistics report showed that women spent more than twice as much time as men on unpaid household work. "The lack of reliable childcare service becomes a structural barrier for women to advance their career," said Chen, "especially in sectors like the tech industry."
Although a large number of young Chinese women have joined tech, they are more likely to concentrate at the lower end of the skill and productivity spectrum, such as human resources, public relations and business operations. Programming, often the power center, remains a male-dominated division, with female programmers comprising only 10.4% of its ranks in 2020, according to a report by Chinese digital working platform Proginn. (In the U.S., figures range between 8% and 11%.)
Of course, China has its share of relatively egalitarian companies. Take ByteDance. While it spent last year at the center of U.S. controversy over data-sharing with Beijing, it's seen at home as valuing diversity and inclusion. Dong, who works in the ByteDance HR department, told Protocol she chose the company for its relatively egalitarian culture. It was the only prospective employer that did not inquire about her marital status when she was job-hunting in 2018, and the supervisor of the department she was interviewing for was a woman in her late 30s.
But Dong thinks ByteDance is swimming against the tide. She says several senior female colleagues in her team still had to quit because they couldn't juggle work and childcare demands. It's not a problem unique to China, but female workers there are getting less help than in other countries. "Tech companies in other countries are trying to create a better environment for female workers who face similar social expectations," Dong said. "But in China, they won't specifically create supportive policies for you. The baseline is lower. It's like, 'I'm already doing well by not treating you badly.'"