Introduction: With the improvement of people’s living and the policy support, the fresh food industry develops rapidly. The non-standard problem of logistics and storage will become more and more important. Helping the efficiency upgrade in the fresh food industry, the cooperation between WeBank and Mei Cai is using the AI technology to manage warehouse and conduct the sales forecasting.
In recent years, with the development of new retail, the demand for the fresh food industry has exploded, showing great potential development. Meanwhile, under the policy of supply-side structural reform, the relevant departments will strengthen agricultural product circulation facilities and market construction and thus the quality of agricultural products is improved obviously. According to the reference, the volume of business in China’s fresh food market is increased steadily from 2011 to 2018. The volume of business reaches 1910 billion yuan, with year-on-year growth of 6.7%. It is estimated that the volume of business in China fresh food market will reach 231 billion yuan by 2020, with a compound annual growth rate of 14.16%.
Although the fresh food industry develops quickly, it also faces a lot of problems. The fresh-food product has a short shelf life, the difficulty of cold chain distribution and non-standard features. The warehouse storage of fresh food, the consumption of products and the distribution will be the challenges for the practitioners. Recently, the WeBank AI group cooperates with Mei Cai company to help improve the smart warehousing and sales forecasting and optimize the efficiency by the AI application.
Focusing on the issues of high commodity wastage rate (high percentage of damaged goods) and the difficulty in control of preparing goods, the two parties will develop the smart warehousing by analyzing the business district, high-speed intersection, the location of the wholesale market, subsidy policy and other dimensions. Through setting a distribution efficiency and performance conditions, the smart warehousing can evaluate the traffic, the surrounding situation and the environmental quality inside the warehouse, to assist in setting up a warehouse and moving a warehouse, and other decisions.
As for the sales forecasting, according to the numerous marketing segmentation scenarios of fresh food e-commerce, WeBank and Mei Cai develop forecasting technologies such as daily sales forecasting, multi-day sales forecasting, real-time sales forecasting. Every forecasting technologies will combine the advantages of multiple algorithm models. They not only combine the ARIMA, FBprophet and other time series algorithms, including Random Forest, XGBoost, and other machine learning algorithms, but they also develop some particular model which is suitable for Mei Cai business. In some specific business scenarios, Mei Cai will adopt business-fit strategies based on the prediction algorithm. For example, in the unsold vegetable program, Mei Cai reduces the percentage of the unsold vegetables on the day to 6.9% and the percentage of vegetables purchased in the morning is limited to 12.5%.
At the same time, they will keep developing the business logic of the fresh food e-commerce and modeling the business logic. They establish lots of basic characteristic models such as promotion model, price elasticity model, sales attribution analysis, commodity substitution relationship model, business profile, and business consumption-ability model. Mei Cai will apply the modeling result to the sales forecasting for the further improvement of forecasting accuracy rate. In the meantime, it will produce a business optimization strategy.
In the future, WeBank and Mei Cai will continue to drive the technology revolution of the fresh food supply chain industry and establish a promotion platform which can keep optimizing the sales forecasting, based on the automated machine learning. Then they will begin to research and develop the AI smart pricing and intelligent contact system. If you want to learn more cases, please go to our website: www.fedai.org
About WeBank AI group:
WeBank AI group is an artificial intelligence research team under Qianhai WeBank Bank Co., Ltd (WeBank). It aims to use the autonomous and controllable, safe and dependable AI technology to explore the new way of Fintech, leading the new direction of the AI industry. Moreover, we are based on industrial application scenarios, starting from finance. We also have a lot of explorations in the frontier of AI with representative achievements including federated learning, transfer learning and so on. As a leader of federated learning, WeBank not only proposes the new direction of “federated transfer learning”, but also leads and promotes the ecosystem construction of AI cooperation under the protection of data privacy over the world.
About Mei Cai:
Mei Cai was founded on June 6th of 2014. Mei Cai always tries to use the internet thinking to change China’s agricultural market. By its particular mode: one chain and one platform for farmers and restaurants, Mei Cai upgrade the agricultural product supply chain to improve the circulation efficiency for benefiting both sides. They focus on providing a full category of one-step food procurement services for the national nearly 10 million restaurants. Mei Cai keeps the fast growth in recent 5 years.