To survive China’s cost-conscious market, global brands embrace AI and robots

Multinational companies have expanded their use of AI and robotics in China to survive “life or die” competition in the world’s second-largest consumer goods market, where local rivals have sharpened their edge and shoppers often switch between brands for better value, analysts said. L’Oréal, for example, has accelerated its deployment of artificial intelligence and automation to support its growing e-commerce footprint and operational needs. After launching a smart operations centre in Suzhou, east China, the cosmetics giant rolled out automated sorting systems, mobile robots and intelligent storage to speed up deliveries. The French multinational opened the second phase of its UPX smart manufacturing workshop in the city last month. The highly automated facility integrates AI-powered quality inspection into its core production lines, nine of which are now fully automated. “China’s AI and robotics ecosystem is moving very quickly, and we want to grow and invest at the pace of local technology innovators,” said Marc-Antoine Poulle, senior vice-president of operations for North Asia and China at L’Oréal, during a ceremony marking the 30th anniversary of the company’s Suzhou plant on June 11. Swire Group has also integrated AI into customer service, logistics and aviation operations. At Beijing Taikoo Place, the company introduced TK Mates, an AI shopping assistant. Deployed through its digital membership platform, the tool offers personalised fashion recommendations, product searches and tailored customer service, helping to keep shoppers engaged beyond their visits to the mall. Swire Coca-Cola has also developed a first-of-its-kind smart robotic picking solution at its Zhengzhou plant. The system combines sorting robots with automated guided vehicles to automate the handling of plastic-wrapped pallets, a long-standing challenge in the drink industry that reflects wider efforts to apply robotics to complex logistics in the country. “China’s AI application ecosystem is vibrant and dynamic, showing remarkable progress in cross-industry integration, with implementation practices that rank among the most advanced globally,” said Hemione Hudson, chair and CEO of PwC China, in the Global AI Performance Study China report released in June. The report found that the most AI-ready companies achieved AI-driven financial performance 7.2 times higher than other respondents, underscoring the value of stronger capabilities. It also found that Chinese enterprises were particularly strong in applying AI across industries and ecosystems, with penetration rates for cross-sector collaboration and ecosystem partnerships about two to three times higher than those of other surveyed companies.