China’s AI-Led New Retail Environment – Everything You Should Know

China’s booming economy is powering its retail industry’s growth.From e-commerce, the industry is now moving towards “New Retail” and integrating fast-evolving technologies like AI and machine learning. And China aims to become the world leader in AI.

The Rapid Changes in Retail

From traditional brick & mortar retail to e-commerce was a big step. However, once that big leap happened, everything began to change, rapidly. Easy access to network and communication infrastructure and the fast growth of mobile technology changed the retail world. Cross-channel integration and seamless customer experience using retail analytics is now the main focus.

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Alongside all this, the fast growth of artificial intelligence, machine learning, and related technologies, were changing various industries including retail. In China, the country’s economic growth began to drive demand for various goods from food and grocery to fashion and technology.

China’s New Retail

Jack Ma, Founder of Alibaba, defined a new concept in retail. New Retail was the term he used to denote the next stage of growth, after e-commerce. New Retail denotes a full integration of online and offline operations, logistics, and data. While providing a seamless shopping experience to customers, it makes retail operations more efficient and effective. New Retail uses complex retail analytics involving inventory, sales, and customer data, besides market trends and other external factors to predict stock replenishment and product placement.

The next step is the integration of machine learning, AI, and other advanced tools into this new retail realm.

China’s Integration of AI into New Retail

The Chinese government recently issued a declaration stating its plans to become the world’s leader in AI in a few years. China has a huge pool of talent, well-versed in emerging technologies. They have fewer restrictions on the collection and use of information, and a government that encourages foreign investment into retail to fund these innovations. It also has a good percentage of young consumers more willing to share a lot of personal information in exchange for convenience and personalized service.

Alibaba, the China-based international e-commerce giant set up cashier-free stores, with the first one in Hangzhou. This was the Tac Cafe. Customers can dine and shop here, order what they want using interactive screens and exit the store without the need to pause at the checkout counter. Alibaba also opened checkout-free grocery stores in 2016, called Hema supermarket. This was their flagship venture into their vision of New Retail.

F5 Future Stores are another set of AI-powered smart stores. There are many other players like JD Daojia, FxBox, Take Go, etc. using the latest technologies to change the way retail works.

The Technologies Behind These Smart Stores

These stores make use of Big Data, retail analytics, artificial intelligence, machine learning, face recognition, barcodes, RFIDs, and mobile payment technologies.

Big data and retail analytics help these stores to determine what items to stock and when. They also help identify customers, customer buying patterns and preferences, etc. Customer profiling helps create matching virtual personalities for each customer, and these are shared across channels.

Cameras track and record customer activities in-store, the items they add to their shopping cart are detected using barcodes or RFID tags. Customers authorize mobile payments in the store. When they exit the store, the items they bought are automatically billed and paid for using mobile payment.

China’s economic growth, its huge population with a high proportion of young people more willing to adapt to emerging technologies, its vast talent pool, the ever-increasing  buying power of its middle class, are all driving its retail growth. It is now blazing a trail in retail analytics and New Retail” for the world to follow.

Note: This is a guest post, and opinion in this article is of the guest writer. If you have any issues with any of the articles posted at please contact at   

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Frida has been working as a retail researcher at Intelligence Node for about 5 years. She is very interested in the evolution of retail/ecommerce over time - to what we are experiencing today.

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