Smart Machines Will Make 5% of Digital Commerce Purchases in China by 2020

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Smart machines as a digital commerce customer will go from almost nonexistent today to 5 percent of purchases in China in 2020, as human customers become more comfortable with smart machines and fierce competition forces customer experience innovation, according to Gartner, Inc.

"Smart machines are increasingly penetrating customers' lives and learning the behavior and preferences of their owners, said Gartner research director Sandy Shen. “Some will become smart agents that take actions on behalf of their owners and become a customer of digital commerce."

Gartner identifies three stages as smart machines become digital commerce customers:

1.  Human customers give commands to smart machines to place orders for them, for example, Amazon Echo.

2.  The machine learns more about the user's routine and behavior and automatically makes purchases with preauthorization from the user or from the user's purchase history.

3.  Smart machines gather the contextual information to predict the user's needs and autonomously make purchases for the user. Users still have the option to intervene.

Gartner recommends that IT providers in China partner with smart machine makers and experiment with use cases in which embedded digital commerce offers good user value, such as convenience or enhanced experience.

Other new predictions from Gartner regarding digital business in China include:

By 2019, the crowdsourcing model will open 100,000 IT job opportunities to relieve the pressure of the turnover rate in China.

China's high rate of growth, fierce competition and rising labor costs have led some IT service providers to look at new approaches to solving resourcing challenges for important projects. They build a public crowdsourcing platform to manage the outsourcing of social, mobile, analytics and cloud services for clients and use crowdsourcing techniques to break up large jobs into smaller components, such as application development services, which can then be outsourced to other firms through the platform.

Official data from the National Bureau of Statistics of China indicates that 7 million students graduate annually from universities and colleges and 10 percent of these graduates have engineering and science-related degrees. However, the job market is saturated, meaning most graduates are open to do freelance jobs. The crowdsourcing platform provides a means for these new graduates to connect with opportunities that leverage their skills.

"In the long run, we believe crowdsourcing will be a valuable option to leverage external resources and help providers strengthen their key competencies," said Gartner research director Tina Tang. "It will also help providers extend their capabilities to other value-added services and increase innovation. Many of the best new ideas will be found in nontraditional development communities and platforms. It has the potential to revolutionize China's IT services market."

Gartner defines crowdsourcing as the process for sourcing a task or challenge to a broad, distributed set of contributors using the Web and social collaboration techniques. In this context, 100,000 job opportunities refer to 100,000 professionals delivering work through crowdsourcing; it is not the same as 100,000 full-time jobs.

By 2020, the Baidu, Alibaba and Tencent (BAT) platform will dominate governments' digital access approaches to deliver public services in China.

About 30 percent of China's 284 cities (excluding county-level cities) have already used the public-service access platforms from Tencent and Alibaba to deliver public services, penetrating into public security, traffic control, education, energy cost payments, and border exit and entry applications. Although Baidu hasn't provided named public services access, it already has a knowledge base in healthcare, education and real estate, for example, access to doctor appointments through a health service category on its platform.

According to Gartner, more than 70 percent of Chinese cities (excluding counties) will use BAT's platform as the access point to deliver public services by 2020.

Gartner research analyst Eileen He said that as mobile technology and BAT's ecosystem penetrate every aspect of people's daily life, it's natural for most people to choose BAT's mobile access as a favorite or convenient approach to submit or use public services.

"Compared with a government's website, independent mobile apps and other online access, users will use BAT's central access more often, rather than search dispersed access channels everywhere," said Ms. He. "Of course, a certain user segment will still go to offline public-service centers; for example, older, unskilled Internet users."

More detailed analysis is available for Gartner clients in the report "Predicts 2016: New Delivery Model, Advanced Technology and Internet Players Enable Digital Business in China." This research note is part of Gartner's Special Report "Predicts 2016: Algorithms Take Digital Business to the Next Level" a compilation of 85 reports focused on the top predictions and actions that will enable organizations to shape their digital future.