Artificial Intelligence speaks Chinese

From the 33rd floor of the office building has a breathtaking view. Toward the north, visitors look at densely forested hills. In the south, are the enticing sea and Hong Kong. “We want to remain attractive to our employees through our new location,” said BING Xia, Deputy Chief Executive for International Business at the Chinese startup Malong, headquartered in Shenzhen.

The company is just four years old. However, it has expanded so much that it had to move into new premises. The company operates additional offices in Beijing, Shanghai, Tokyo and Arkansas. Furthermore, Shenzhen City Government also supported the company in moving into the new premises. Chinese cities like Hangzhou, Xian and Shenzhen compete with each other and have a lot of attractive offers for innovative startups.

The company, founded by American Matthew Scott and Chinese HUANG Dinglong – the company name Malong is made up of their first names – deals with computer-aided vision, a subfield of artificial intelligence. “We are just in the early stages of development and cannot predict what computer vision will be able to do one day,” says BING Xia.

Nowadays, everyone is talking about facial recognition, in which China, with young companies such as Megiiv Technology and Sense Time, is leading technological development. Instead of identifying faces, Malong focuses on product recognition and works with retailers and consumer goods manufacturers worldwide. “Such cooperation is helpful for both sides. We understands the needs and difficulties of each industry better and our partner’s benefit from our services,” adds BING Xia.

Until now, consumers are faced with the problem that if they like a piece of furniture or clothing, for example, during the holidays, back at home, they are lacking the right words to describe shape, colour and pattern and are unable to find the item in search engines or in stores. Malong offers a solution: Consumers photograph the products and then upload the photos in an app. In a matter of seconds they can see which comparable models Malong’s partners have on offer. The product can then simply be ordered through the app. This technology also describes patterns and colours of fabrics of fashion designs without them having to manually describe them. Product descriptions can therefore be produced more efficiently and faster.

Malong has already taken new paths to gradually conquer the vast field of computerised vision. For example, with this technology, it will be possible to take less than a second to determine which parts of the brain are affected by a stroke based on computed tomography scans. According to Malong, this procedure is 308 times faster than the human eye. For patients and health insurance, the technology offers great opportunities. Diseases are diagnosed faster and more accurately than traditionally.

Recently Malong announced a cooperation with the University of Bern. The cooperation is a result of the agreement between the Canton of Bern and Shenzhen nearly four years ago. Both sides want to promote economic cooperation. In mid-November last year, a Memorandum of Understanding was signed in Shenzhen in the presence of Bern’s Economics Director Christoph Ammann. In the future, synergies between artificial intelligence and brain tomography will be explored in two research institutes in Bern and Shenzhen.

Attractive Prospects

 The company’s international reputation is in part due to its hiring choices. Malong has attracted international talents such as HUANG Weilin who leads the research department. Previously, HUANG Weilin obtained his doctorate in the prestigious Visual Geometry Group at the University of Oxford where he worked as a postdoctoral researcher. HUANG listed several reasons why he was drawn back home, despite his promising academic career. “At Malong, I can help people with my developments,” he emphasises. In addition, working with Malong does not have the anonymity of universities or large companies such as Alibaba or Tencent. Furthermore, his move to Malong did not mean leaving academia. About half of the published studies come from the research departments of companies, HUANG Weilin estimates.

Startups like Malong may one day be financially attractive. The employees are involved in the young companies through stock options. If the IPO or the company is sold, a lot of money can be generated. Just over a year ago, venture capital firm Softbank China Capital invested RMB 220 million (£25 million) in Malong. In August of last year, it was announced that Accenture, one of the world’s leading management consultancies, invested in the Chinese startup and signed a cooperation agreement.

Race between America and China

In parts of the Western world, there is still the persistent misconception that China is a world champion in copying and imitating and is unable to develop and bring innovative ideas to the market. But times have changed. Shenzhen, with young companies like Malong, is a stronghold of innovative and modern China.

China has just recently started play a role in artificial intelligence research. The theoretical foundations for artificial intelligence were created in American, British and Canadian institutes. Now, the next step is to develop business models. And that’s where China is leading.

According to Lee Kai-fu, who previously headed Google China and now invests in young Chinese high-tech companies as the head of Sinovation Ventures, China leads the future in artificial intelligence.

China has more than 800 million internet users who reveal a lot about themselves on the Internet

So far the practical application of artificial intelligence has faced the problem that there were not enough data and computers with high computing performance. This has now changed. China, with more than 800 million internet users sharing much about themselves online, provides the ideal environment to test the theoretical foundations of artificial intelligence. In addition there are powerful technologies and ambitious entrepreneurs who want to fulfil their dreams.

China has a moved ahead in all these fields of foreign competition. Malong is aware of this. “In the past, China had to catch up with foreign countries on already pre-tracked paths. Those days are over. Now we pave the way for the rest of the world.”

China is speeding up the development of delivery drones

China wants to play a leading role worldwide in the production of unmanned aerial vehicles (UAVs). In December 2017 the government has published new guidelines for the civilian unmanned aircraft industry to support UAV development. The government expects the market value of the industry to increase by an average of 40 percent by 2020 to RMB 60 billion (£7 billion). The long-term growth goals are even more ambitious. By 2025 the Chinese government aims to more than triple the UAV industry to RMB 180 billion (£21 billion).

The new guidelines already had a positive effect on China’s UAV industry. One of the country’s largest online retailers, JD.com, announced a US$ 2.5 billion round of financing for its logistics subsidiary, including investments in automation, drones and robotics. The announcement was made by Richard Liu, Chairman and CEO of the Group in February 2018.

He even got support from Google. The search engine group invested US$ 550 million in JD in June, which was a likely move to improve the company’s standing compared to US logistics leader Amazon. In August 2018, a startup accelerator was announced to support the company’s UAV ambitions.

JD’s drone delivery plans focus on China’s remote rural areas which currently incur high delivery costs. With drone delivery the group wants to be able to deliver goods faster and cheaper to these regions, Richard Liu said in an interview with CNBC. Richard Liu expects that fully automated logistics will reduce costs by 70%.

Chinese online marketplace Alibaba also has made a move towards drone technology. According to the US magazine Popular Science, the e-commerce company has concrete plans to offer deliveries via drones. In tests drones collected meals and other packages in restaurants and shops at Jinshan Industrial Park and flew them to their delivery points. From there, human drivers transported them the last stretch to the customers. “By using planes the delivery services can bypass Shanghai’s crowded streets. This can reduce the total delivery time for customers in the area by over 20 minutes”, reporters observed. In the next few years Alibaba wants to roll out this service to other cities.

This delivery robot can transport up to 300 kilograms.

This delivery robot can transport up to 300 kilograms.

Chinese drone logistics isn’t solely focused on the last delivery stretch, which can account for more than 50% of the total delivery costs. Long-range drone delivery is another fiercely competitive development area.

According to a report, Alibaba subsidiary Cainiao is working with the University of Beijing on a long-range drone which has a payload of one tonne and a delivery range of 1,500 kilometres. First tests have been scheduled for 2020 and it is scheduled to be put into services by 2025. Meanwhile JD is developing a similar project with a 300 kilometre flight radius and a payload of one tonne.

UAV delivery on the road is comparably easier to design and implement. Traveling delivery robots are long commonly used in China and are part of the automated supply chain: JD’s carry a payload of up to 300 kilograms in 30 parcels, drive 15 km/h on bike lanes, stop at red lights and orientate themselves with their radar sensors.

What is IKEA doing in China?

On Thursday, 6 December Swedish furniture and home retailer IKEA Group announced that it will invest more than RMB 8 billion to build a large complex in Shanghai. The complex includes a shopping mall and five office buildings. It will measure over 430,000 m2 and is IKEA’s first project of this kind worldwide.

According to Chinese media reports, the shopping centre is scheduled to open in 2022. IKEA Shanghai will operate the shopping centre. DING Hui, President of the IKEA Shopping Centre in Shanghai, expressed in an interview his believe that China might become the testing ground for new IKEA business strategies before they are exported to other parts of the world.

The five office buildings IKEA plans to build in the Shanghai project will cover an area of 60,000 m2, 3 will be used for IKEA’s 3,000 employees in China, the other two will be leased to large and medium-sized enterprises.

This is part of IKEA’s attempt to strategically transform itself. “We are currently have several strategic transformation projects ongoing in various markets around the world. We want to pay more attention to digitalisation, online and offline integration,” said Anna Ku, President of IKEA Retail China in an interview with the Chinese online magazine the entrepreneur.

Is IKEA forced to transform?

Earlier in November this year, IKEA announced “the biggest strategic transformation in the company’s history” within two years the group aims to lay off 7,500 employees while hiring 11,500 new e-commerce staff.

CAO Lei, director of the China E-Commerce Research Center, said that IKEA’s transformation is tied to e-commerce and the Internet. If IKEA wants to further sustain growth the group has no choice but to embrace the internet.

However, YANG Fan, Public Relations Manager at IKEA China, the lay-offs earlier this year were not connected to IKEA’s push to transform itself. “E-commerce is part of IKEA’s future and an important milestone in IKEA’s development. IKEA’s transformation is focused on providing a more efficient and customer-focused shopping experience.

Taking the E-Commerce Road

According to data released by IKEA, IKEA’s sales exceeded RMB 14.7 billion in August 2018, an increase of 9.3%. In China IKEA sustained a growth of 19.4%. In October this year, IKEA opened an online shopping mall in 149 cities across China, providing online shopping services and launching a WeChat App. Even though IKEA is currently focused on building their own e-commerce platform, Anna Ku does not rule out cooperation with other third-party e-commerce platforms.

“IKEA is late to the e-commerce business, especially in China,” said Anna Ku. This causes difficulties for IKEA as Chinese consumers have high standards for e-commerce experiences. IKEA has to build both the IT and distribution infrastructure to cater to Chinese standards, which is time consuming.

In addition, IKEA has also started to cooperate with other Chinese technology companies. Xiao Dian, General Manager of Xiaomi’s IoT platform, announced in November that it will work with IKEA to build integrated home furnishing. IKEA has scheduled the release of a full range of intelligent lighting products which will be connected to Xiaomi’s IoT platform, marking not only the first cooperation with a Chinese technology company but also IKEA’s first smart home furnishing.

IKEA has become a staple for affordable, modern furnishing and as the group continues its strategic transformation, not only European analysts will be closely watching but also their Chinese counterparts.

China’s Health and Fitness Industry is turning to Online Platforms

Broad shoulders, abdominal muscles and firm arms … A fitness craze has hit China in recent years. China’s increasingly urban and young population are driving the growth of a new health and fitness industry in China.

The health and fitness industry boom started in 2015 with the introduction of the O2O (online to offline) system. Lefit, based in Hangzhou, is currently the largest O2O fitness platform with gyms in all major Chinese cities. Membership costs RMB 99 (£11) / month giving members access to any gym 24 hours, 7 days a week.

The person leading the change in China’s health and fitness industry is HAN Wei. In 2013, the then 37-year-old HAN Wei was the marketing director of Alibaba Group, the executive general manager of Taobao Tianxia Media Co., Ltd., and the public relations director of Alibaba. After leaving Alibaba, HAN Wei went to the US to pursue further studies. In the United States, HAN Wei found that the gap between Chinese and American Internet companies is not as big as imagined. “Chinese always think that the United States is more open and free. In fact, China and America are only different in form of expression. The biggest opportunity in the world is undoubtedly in China, because the most prosperous market is in China.”

The idea behind creating an O2O business model stemmed from Taobao’s business model. O2O gyms connect consumers directly with the health and fitness industry. Through the online systems users are able to choose time, venue, classes and coaches online. By giving users more flexibility to plan their active lives through the O2O system, gyms are able to increase their utlisiation rate.

However, Lefit’s online model also generates significant data giving insight into users choices and preferences. This allows the platform to offered tailored services to their members and to support them making healthier lifestyle choices. As of October 2018, Lefit has over 3.2 million registered users, 6,000 coaches and nearly 500 gyms.

However, the ClassPass system also faces challenges in China. Unlike in the US, where 70% of the gyms are large chain gyms and 30% are small studios, China’s market is dominated by small studious. Therefore creating a homogeneous product offering across these smaller studios has been an issue HAN Wei and his team have been facing.

However, HAN Wei is certain, with the craze in health and fitness continuing more and more sports will be made available on Lefit and maybe in the future Lefit will not only be able to offer gym services but also sports like badminton, basketball, and table tennis.

Ping An Insurance: Research investment in the next decade will reach RMB 100 billion

Ping An Insurance’s management revealed today on the group’s technology-themed investor open day research investment budget for the next decade. In order to support the group’s “financial + ecological” strategy and to promote future performance growth, the group expects that their research investment will reach RMB 100 billion (£11 billion) in the next decade. Specifically, Ping An will spend 1% of its annual revenue on research and development of financial technology and medical technology. Ping An Insurance has invested a total of £6 billion in research and investment in the past decade.

Ping An Insurance is China’s biggest insurer, with £90 billion in premium revenue.  It reigns supreme as the industry No. 1 by profit and return on equity. Its market capitalisation, at $136 billion, is 74% larger than the country’s old standard, China Life, and 64% above the largest listed pan-Asia insurer, AIA. By this measure it is the world’s largest insurer except for Berkshire Hathaway.

To make sense of these startling numbers — and of Ping An’s rise to No. 10 on the Forbes Global 2000 list — look beyond the stodgy insurance business and into the realm of high technology, whose branches reach into every aspect of commerce in China and eventually show up in the mobile handsets of Chinese consumers.

5 Things to look out for at the 2018 Tencent Global Partner Conference

On 1 November the 2018 Tencent Global Partner Conference will open in Nanjing Jiangsu Grand Theatre. This will be Tencent’s first industry conference after having gone through restructuring earlier this year. This will also mark the first event ahead of Tencent’s 20th anniversary this year. There are 5 things we are particularly looking forward to at the conference.

1. The release of Tencent’s 20th anniversary film “River”

Tencent’s 20th anniversary film is called “River” and will footage from the foundation of the company, developments over the past 20 years as well as the company’s vision. According to a company spokesperson the film has been named “River” to show the continuous forward movement of the Tencent. The film is said to be centred on Tencent’s mission to jointly build a “Digital China”. The film has sparked wide excitement amongst industry experts as it is expected to set the tone for the company’s future development.

2. Internet driven development

On 30 September Tencent announced the third group restructuring which many industry experts saw as Tencent’s attempt to focus on internet driven development.

The 2018 Tencent Global Partner Conference will see the attendance of China’s leading smart technology and artificial intelligence companies. Industry experts will be paying close attention during the conference at Tencent’s strategy for internet driven development and future goals.

3. Science and Culture Show

Over 125 companies will be presenting their project around one of the three themes at the conference: Innovation Block, Cultural Garden and Science and Technology Forest.

The Science and Technology forest will see projects like “sister” robots, and vehicles equipped with Tencent’s automatic driving system. Projects in the Culture Garden will include a DreamWorks art show. The Innovation Block features the latest innovations of the smart industries from everyday routines to an augmented reality mobile phone tour of Yunnan.

4. The Future of Speech

This session of the conference is especially focused about how speech and language will be used in the future across industries. It will look at how speech will affect the creative industries as well as how new technologies will use speech as a direct communication tool. The session aims to connect researchers, entrepreneurs and artists to explore the use of speech and its future application.

5. New Wenchuang Open Day

The conference will host the two-day open day at the 6th National Theatre of the Jiangsu Grand Threatre. China’s leading cultural and creative industry representatives have confirmed their attendance and the opening will simultaneous screen popular film and television programs. The open day will also host a creative exchange where guests can share short videos, vlogs, movies, TV series and etc.

Are you planning to attend the 2018 Tencent Conference? These are the 5 things we are most looking forward to. What are you looking forward to? Let us know in the comments.

Alibaba: Tmall wants to enter product development

China’s online giant Alibaba has teamed up with Shanghai Fashion Week to demonstrate what fashion shopping of the future can look like. New technologies are intended to close the gap between consumers, retailers and brands.

Virtual catwalks

The Shanghai Fashion Week took place in China’s most important fashion metropolis from 10 to 17 October. The event is an excellent opportunity for China’s leading online retailer Alibaba to show how in the future for retailers and consumers can benefit from these events.

Through the B2C online shop Tmall, the company invited the four Chinese fashion brands Me & City, IMMI, Banxiaoxue and Zhangshuai to trial new technology. Based on the brands’ design patterns, the Tmall software visualised the garments movements or predicted fits for different body types. Users were able to follow the virtual looks and live fashion week shows on the Taobao and Tmall apps.

Tmall wants to use this technology to give young designers, who cannot afford a “real” runway show, more online presence, commented Tmall’s Vice President of Fashion, Anita Lyu in an interview on the company’s own blog Alizila.

Heat maps measure visitor frequency

The Virtual Runway was just one of many new technology Tmall trialled at the Shanghai Fashion Week. A “showroom robot” allowed shoppers to take a closer look at products, talk to designers, and place orders in real time. Tmall technology also provided pedestrian heat maps throughout the showrooms that analysed which brands, items, clothing styles, colours and fabrics attracted the most attention.

Customising Runway Looks

The virtual show allowed users to tap on each garment and to view its details in 360 degree view. Users were able to change the measurements of the garments – from height and weight to chest, waist and hips – to see what the outfits would look like on their own virtual model. The software also indicated where garments would be too tight or not fitting properly.

 

 

Tmall wants to be part of the product development

According to Alibaba’s “New Manufacturing” strategy and Tmall, the 3D modelling solution will be made available to apparel brands in the near future. Once all the properties of a fabric are known – including colour, how the fabric reacts to different levels of compression, friction, and light – each garment would be virtually replicated in just five minutes to an hour. In other words: Tmall wants to give its fashion suppliers tools with which designers can directly create their virtual patterns on Tmall. “The tools will help retailers save time and money and reduce the cost of product development cycles by up to 80 percent, including patterning and prototyping, material sourcing and production,” the company said on the blog.

Currently this new service is still in the development phase. The insights gained through interactive technology could help brands to better engage consumers, get to know them better, better forecast market demand, and to build consumer-centric manufacturing.

Shaohaihui aims to revolutionise the middle-class housing market

China’s new middle class is driving changes in China’s retail landscape. On Saturday, 13 October Shaohaihui, pioneers in the intelligent housing industry, launched their home direct selling platform. Later this year the company will open 2,100 stores around China to give consumers the opportunity to see the over 300 million designer furniture.

Shaohaihui’s design are created to bring appealing designs to middle class families who often live in small apartments due to the lack of affordable housing in China’s metropolis. Designs are focused on utilising space around the home with an appealing minimalist design – a concept also known as “Edge Zero”.

In Shaohaihui’s vision one-bedroom apartment are planned with an “open link”. The four-way design creates 360-degree multi-functional furniture. The three-sided invisible storage ensures that the room has an overall cleanly and spacious appearance – something which can be difficult to achieve in a small living space. The designs not only make use of multi-functional furniture but also new smart features such as smart lights are integrated in this new design approach.

To achieve its ambitious goal to revolutionise the middle-class housing market, Shaohaihui is partnering with upcoming Chinese designers and start-ups to create homes which are centred on the needs of young Chinese consumers. Since 2016 42 upcoming Chinese companies, with an annual output exceeding £1.1 billion have joined to create bring the “Edge Zero” design to all parts of China.

China’s growing middle class has become an important consumer base for many Chinese start-ups. According to a study by consulting firm McKinsey & Company, 76 percent of China’s urban population will be considered middle class by 2022. But by 2022, thanks to a growing number of higher-paying high-tech and service industry jobs, 54 percent will be classified as “upper middle” class – meaning they earn between US$16,000 and US$34,000 a year.

World Artificial Intelligence Conference: Where is China’s AI technology heading?

The 2018 World Artificial Intelligence Conference was opened on Monday 17 September 2018 in Shanghai under the theme of “A new Era Empowered by Artificial Intelligence”. The conference saw attendance from over 200 experts and entrepreneurs form over 40 countries discussing which challenges China’s AI sector would be addressing in the upcoming years.

China is considered a leader in AI and has a significant advantage towards its western competitors due to the large number of data Chinese companies have been able to collect from Chinese users. For Eye Cool’s CEO ZHOU Jun, a Chinese AI technology firm, the challenges in the AI sector are obvious. In his conference speech the entrepreneur highlighted the importance AI is going to play in the cyberspace security sector in the upcoming years.

Cyberspace security is becoming a new challenge the AI sector is addressing”

While AI has the potential to significantly contribute to increased cyberspace security, the area poses a political quagmire. Risks of data and personal privacy disclosure, vicious cyber-attacks, etc. pose a significant risk to the security of sensitive social and national security information. However, for entrepreneur ZHOU Jun these problems will resolve with the growth of the AI sector.

Businesses until now have been prioritising AI development in the finance and transportation sector as the increased efficiency allows to optimise company spending. Yet, developing AI in the security sector is dependent on having a comprehensive data set which spans across all sectors. Having pioneered the use of AI in financial services security over 20 years ago, ZHOU Jun is certain that the cyberspace security is the next step for developments in AI. However the entrepreneur also cautioned that progress is also dependent on companies building stronger relationships with people.

“Companies must become more people-orientated to accelerate the maturity of AI. Only by working together can we reduce security risks.”

China’s AI sector is heading towards a more interconnected sector to increase security on the cyberspace and although AI technology is making rapid progress, communication with humans is now moving into the centre of AI development.

Global Perspective

In his recent book, AI Superpowers: China, Silicon Valley, and the New World Order, internationally renowned AI expert Dr. Kai-Fu Lee outlines the global trends in AI. According to Dr. Kai-Fu Lee, China will lead in areas where massive data and maniacal focus lead to better products (such as Internet applications, mobile applications, payment and commerce applications, and computer vision and speech applications). But US will lead in areas where China doesn’t have quality data (such as financial and health applications), as well as areas which require cutting-edge technologies (such as autonomous vehicles).  New research breakthroughs are more likely to come from US than from China. The UK government has made a commitment to boost the UK’s position in AI through a sector deal. It is estimated that AI will add £232 billion to the UK economy by 2030.

 

  Looking back on UK-China Business Leaders Summit

Hampton Group has successfully facilitated the first and second UK-China Business Leaders Summit. The purpose of the summit is to create a platform for UK and Chinese companies to engage in dialogue.

The first summit saw attendance from over 400 UK and Chinese guests including business leaders from China’s private sector, including top property developer China Vanke, leading Chinese private equity firm China Minsheng Investment (CMI) and other well-known financial services companies. The second summit received increased interest from UK and Chinese businesses with over 600 business leaders attending.

The summit strengthened UK China business relations. It resulted in a pledge of a £1.5bn investment from China Minsheng Investment Corporation (CMI) which announced it was opening its European HQ in London. The investment targets advanced technology, financial services, off-shore engineering, new energy and environmental protection. Most recent investments include a £76.7m lead in the funding of UK’s eToro. MAP Environmental and ZNShine Solar also announced a joint venture to purchase, develop and construct £400m of UK solar assets.

Hampton Group is committed to continue providing a platform for UK-China business exchanges. In 2019 the World Chinese Entrepreneurs Convention (WCEC) will be hosted in London. The WCEC is the largest and most important independent event that brings together Chinese entrepreneurs from around the globe. This will be the first time the WCEC has been held in Europe. Hampton Group’s Chairman Chris Yang has been officially appointed by the WCEC Secretariat as the Executive Chairman of the Organising Committee of the 15th WCEC. The Convention expects to attract over 3,500 delegates from around the world and will provide a unique opportunity to engage with Chinese business leaders.