---
title: "JD.com to Halve Workforce, Taxis Turn into 'Convenience Stores'—Is the New Economy Taking Aim at Distributors?"
description: "Distributors, caught between manufacturers and retailers, seem poised to foot the bill for the new economy again. JD.com CEO Liu Qiangdong announced at the World Retail Congress in Spain that the company will halve its workforce and operate fully automated with AI, while some Shanghai taxis have begun selling snacks and drinks, taking a cut of sales. These developments threaten traditional distributors, but experts argue that AI cannot replace the human touch in market development and customer relations, and the taxi retail model may face challenges similar to failed unmanned shelf projects."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2018-05-17"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/zL5Y8OqFGqX3CJmU1Ju-ag"
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# JD.com to Halve Workforce, Taxis Turn into 'Convenience Stores'—Is the New Economy Taking Aim at Distributors?

> Distributors, caught between manufacturers and retailers, seem poised to foot the bill for the new economy again. JD.com CEO Liu Qiangdong announced at the World Retail Congress in Spain that the company will halve its workforce and operate fully automated with AI, while some Shanghai taxis have begun selling snacks and drinks, taking a cut of sales. These developments threaten traditional distributors, but experts argue that AI cannot replace the human touch in market development and customer relations, and the taxi retail model may face challenges similar to failed unmanned shelf projects.

Distributors, caught between manufacturers and retailers, seem poised to foot the bill for the new economy again.
Recently, to enhance JD.com's service and management competitiveness, CEO Liu Qiangdong announced at the World Retail Congress in Spain that in the future, JD.com will halve its workforce, with employees working only 2-3 hours a day, fully realizing a 'unmanned company' that uses artificial intelligence (AI) to disrupt traditional management and service methods.
On one front, AI is 'taking advantage of the situation,' and on the other, taxis are also 'crossing over.' According to 'The Paper,' some taxis in Shanghai have opened convenience stores, with first orders priced at 'one cent' to attract buyers, and drivers earning a 15% commission.
With pressure from manufacturers and powerful retailers on one side, and AI and ride-hailing services encroaching on the other, do traditional distributors still have a way out?
1
**JD.com's Workforce Reduction and Taxi Retailing**
**Distributors Hit Again**
At the World Retail Congress in Spain, Liu Qiangdong stated that AI will replace human labor. He said that in the future, JD.com will be 100% unmanned in operations, becoming an automated company; fully leveraging AI technology can reduce working hours, with employees working only two or three hours a day. JD.com currently has 160,000 employees; with AI, only about 80,000 would be needed.
It seems JD.com is merely undergoing a technological upgrade, but that's not the case. After implementing unmanned operations, JD.com aims to cut 50% of its workforce, meaning a large number of frontline employees will face unemployment. Those with average contributions, low value, and high replaceability will undoubtedly be eliminated. Clearly, distributors, whose main functions are delivery, store visits, product placement, and payment collection, are among the 'key groups' that AI will replace in the future.
As AI advances, Shanghai taxis have also seen the emergence of 'convenience stores.' Media reports indicate that some taxis in Shanghai have snacks and drinks placed behind the front seats, with restocking done by returning to the company, where suppliers provide goods. To encourage purchases, the first order in these taxi 'convenience stores' costs only 0.01 yuan as a symbolic fee.
2
**Is It New Retail 'Stealing Jobs'**
**Or Another 'Guomei Xiao'?**
In recent years, calls for distributors to be replaced have grown louder, from hypermarkets to e-commerce, all labeled as distributor 'terminators,' with the latest being AI and new retail.
Can AI replace distributors? Mr. Zheng, who has over 20 years of experience as a distributor, believes this should be viewed dialectically. On one hand, AI can reduce positions such as warehouse managers, delivery personnel, and drivers in a distributor's backend system, effectively 'cutting staff.' Even if distributors adopt 'unified warehousing and distribution,' with the advent of intelligent sorting machines and robotic arms, the role of distributors who only deliver and collect payments will greatly diminish.
On the other hand, AI can hardly replace the functions of market development, promotion, and customer relationship maintenance. Especially since market promotion is now typically 'one store, one strategy,' sales personnel must tailor plans based on the retailer's actual situation to achieve sell-through; AI struggles to replace traditional distributors in this area.
Shanghai taxis transforming into retail platforms, even offering drivers a 15% commission on sales, may impact distributors lacking networks. Imagine manufacturers and brands directly partnering with taxi companies to reach consumers, significantly reducing the distributor's role in distribution. However, selling in taxis has significant limitations. Apart from some beverages and snacks, and customers with immediate consumption needs, few are willing to buy in taxis. To attract initial traffic, taxi 'convenience stores' may use 'special prices' or high 'subsidies,' but whether they can cultivate rigid demand remains to be seen. Issues such as product damage, loss, returns, and counterfeits also need verification.
The market is not short of examples of such 'pseudo-innovation' failures. Media recently reported that 'Guomei Xiao,' an unmanned shelf project that secured three rounds of financing, issued nationwide suspension notices for unmanned shelves starting April 2018, planning to lay off over 2,000 people. Currently, operations in Beijing, Shanghai, Shenzhen, Hangzhou, and other cities have stalled, with warehouses in several cities emptied. Will Shanghai taxis becoming retail platforms end up as another 'Guomei Xiao'?
3
**New Retail Arrives: Where Do Distributors Go?**
Whether AI or taxi 'convenience stores' can cross over and 'rob' business, food distributors should pay attention to changes in the broader environment. Facing the constant emergence of 'new things,' where do distributors go?
First, distributors must adopt a 'keep up with the times' mindset. Some older, more experienced distributors are most prone to resting on past 'laurels' and failing to see market changes. If they remain 'stuck in their ways,' these distributors are most likely to be eliminated.
Second, in the face of the 'new retail' wave, distributors must not panic. Whether it's e-commerce, AI, or Internet+, these are more about new thinking and new tools that distributors can fully leverage for their own benefit. Treating them as 'a formidable enemy' or 'discarding them like worn-out shoes' is not the right attitude.
Third, the application of new tools or models still relies on people. The market experience and customer relationships that distributors have accumulated over the years are what manufacturers value most and are the distributor's 'bread and butter.' Distributors can use modern tools to upgrade traditional business models and enhance their importance in the manufacturer-distributor chain.
Fourth, for distributors born in the 1980s and 1990s, who are more familiar with the Internet and the new economy, they can seize market opportunities brought by new technologies and achieve overtaking on the curve.
Source: Zhongshi Finance


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