Why are Alibaba and JD.com interested in RFID technology?

In recent years, domestic giants such as Alibaba and JD.com have started using RFID technology.

They usually use RFID in logistics management, anti-counterfeiting traceability, new retail and other fields to enhance their ability to manage the circulation of goods or commodities.

They often integrate RFID technology with other technologies. For example, JD Liquor Industry combines blockchain and RFID technology to solve the problem of anti-counterfeiting in high-end liquor; JD X unmanned supermarket combines RFID and image recognition technology to achieve the entire transaction process of unmanned retail.

RFID penetration in logistics segmentation still has great value to explore

With the rise of online shopping lifestyle, the scale of domestic logistics has grown rapidly year after year, and the low operational efficiency of traditional logistics systems has become unsustainable. At present, the volume of express delivery services in China has exceeded the sum of developed economies such as Europe, America, and Japan, and has consistently ranked first in the world for many years.

According to the "2019 China Express Development Index Report" released by the State Post Bureau a few months ago, the daily average express processing volume of the national express industry exceeded 170 million pieces in 2019, and the annual express business volume exceeded 60 billion pieces. Under enormous logistics pressure, it is clearly necessary to introduce high-tech to achieve efficient and accurate freight transportation.

(Data source: State Post Bureau)

As is well known, JD Logistics has always been praised by the outside world for its fast delivery. Sometimes orders placed in the morning are delivered to the door by the courier in the afternoon. So, behind the efficient operation of JD Logistics system, how does RFID technology play a role?

One of the reasons why JD Logistics can achieve efficient operation is the integration of RFID technology into daily operations. Moreover, JD Logistics is continuously deepening the application of RFID and gradually penetrating into various sub sectors of logistics, further exploring the potential value of RFID applications.

In the daily management of the warehouse, the goods administrator can use RFID technology to achieve real-time tracking of goods, including the source, destination, inventory quantity and other information of goods, which can be collected in real time, greatly improving the supply efficiency of inventory and the turnover efficiency of goods.

As early as 2012, JD.com simultaneously built six large warehousing centers across the country, with a total investment of over 3.6 billion yuan. It is understood that these warehousing centers all use an automated and information-based warehousing management model centered on RFID technology. It can be said that the construction of these warehousing centers laid a solid foundation for JD's efficient logistics in the future.

In 2013, JD Logistics launched a logistics distribution system codenamed "Qinglong", supported by user big data, with data collection coming from RFID technology. During the delivery process, the use of RFID technology to timely collect logistics, information flow, and capital flow not only reduces the error rate of goods delivery, but also greatly improves delivery efficiency.

In August 2017, the world's first fully automated sorting center, JD Logistics Kunshan Unmanned Sorting Center, was officially unveiled and successfully operated. It is understood that the biggest feature of the sorting center is unmanned operation throughout the entire process from package supply to loading. The AGV intelligent freight car loads goods through the RFID recognition area, and the RFID recognition system ensures the correctness of the goods, thereby ensuring the reliability of unmanned sorting.

In addition to conventional goods, JD.com has also introduced RFID technology into other fields.

At present, JD.com is using RFID technology to collect data on the growth process and logistics process of vegetables, and then building a traceability center database. In addition, a complete traceability system with functions such as origin recording, production process query, and logistics monitoring has been developed based on the database.

In April 2020, JD.com released digital solutions for the commodity industry, such as RFID and AI visual recognition, which digitized, digitized, and intelligentized the warehousing, logistics, delivery, trading, finance, risk management, and other aspects of the commodity circulation process, improving the efficiency and security of the industrial chain operation.

Based on the various application scenarios mentioned above, it can be seen that JD has a wide range of applications for RFID technology and is increasingly in line with the development trend of big data, thanks to its platform's ability to access massive amounts of data. At the same time, it also reminds us that RFID, in addition to efficient anti-counterfeiting, process optimization, and improving work efficiency, is the most core development direction for its future as a data collection terminal. It has immeasurable potential and is also the value of RFID as an important participant in the Internet of Things.

RFID brings new vitality to traditional modes

So, how did his old rival Alibaba use RFID technology?

Tmall and Taobao can be regarded as the two retail "trump cards" held by Alibaba. However, as the two online shopping platforms with the highest daily usage rates among the public, Alibaba receives numerous complaints about "counterfeit goods" every year, which undoubtedly causes significant damage to the platform's reputation. Therefore, combating counterfeit goods has always been one of Alibaba's key tasks.

In 2018, Alibaba invested heavily in Smartrac, a leading supplier of RFID and NFC components. The reason why Alibaba chose to invest in Smartrac is precisely because it sees the role of NFC and RFID in anti-counterfeiting and traceability. At present, RFID anti-counterfeiting traceability is most widely used in high-end alcoholic beverages, such as Maotai, Wuliangye, Yanghe and other brands that have already installed RFID anti-counterfeiting systems. In addition, it is also commonly used for the management of other valuable commodities or items.

Jack Ma once stated at the Yunqi Conference that the core of new manufacturing is data. Driven by this philosophy, Alibaba Taobao Factory and Alibaba Cloud IoT Group have teamed up to digitize clothing factories through IoT devices, and the introduction of RFID technology is one of the key links.

On the basis of capacity sharing, Taobao Factory has transformed its production line into a data network through the use of RFID and other technologies, achieving data exchange from the sales end to the production end. In fact, Alibaba's transformation of production plants is not the first of its kind. Fast fashion brand ZARA used RFID technology earlier to achieve real-time tracking from the factory to the sales terminal, thus gaining a reputation for quick response.

In July 2017, Alibaba's unmanned supermarket "Taocoffee" made its debut in Hangzhou. Its name sounds like a coffee shop, but in fact, it is a small unmanned supermarket that integrates catering and shopping. Through the combination of RFID, biometric recognition, image recognition and other technologies, Taobao Coffee has achieved intelligent consumption scenarios such as no cash register, cashless payment, and instant withdrawal. Consumers will automatically synchronize the settlement information between Taobao APP and Alipay APP through the automatic sensing consumption payment channel, and the automatic payment settlement can be completed within 10 seconds.