{"id":2694,"date":"2018-06-16T06:04:50","date_gmt":"2018-06-16T06:04:50","guid":{"rendered":"https:\/\/cbbcfocus.com\/?p=2694"},"modified":"2025-04-23T10:21:02","modified_gmt":"2025-04-23T10:21:02","slug":"facial-recognition-software","status":"publish","type":"post","link":"https:\/\/focus.cbbc.org\/facial-recognition-software\/","title":{"rendered":"Facial recognition software is used across China’s retail sector but what about privacy laws?"},"content":{"rendered":"

New facial recognition technology is shaping China\u2019s retail industry but it\u2019s having to write the rules as it goes along, writes Jake Mendrik,<\/strong><\/p>\n

Facial-recognition technology is central to the current Artificial Intelligence (AI) boom taking place in China. In recent months, three of the country\u2019s vision-based solution start-ups have attained \u2018unicorn\u2019 status, with market valuation of at least USD $1 billion. No other country can claim to have a single one. The tech giants Baidu, Alibaba and Tencent (collectively known as BAT), are also heavily promoting facial recognition software on their respective platforms.<\/p>\n

Government support has undoubtedly helped, with last year\u2019s State Council proposal underlining plans to transform the market into a US $150 billion industry by 2030.[1]<\/a> The technology is also already being applied to the country\u2019s extensive internal security network, further increasing its value to Beijing. However, it is in the retail, payment and e-commerce sectors that the technology\u2019s potential may reap the most rewards.<\/p>\n

One of several major companies leading the Chinese facial-recognition movement is SenseTime<\/a>. The firm\u2019s innovative computer vision and deep-learning technology software has led to over 400 partnerships with domestic and foreign companies from sectors as wide-ranging as surveillance, autonomous vehicles and retail, whilst attracting sufficient investment to ensure its status as the world\u2019s highest-valued AI start-up.<\/p>\n

The application of SenseTime\u2019s software in brick-and-mortar retailers such as Suning, one of China\u2019s largest electronics providers, has helped develop what is being labelled \u2018Smart Retail\u2019. Facial-scanning software can efficiently gather data related to age, gender, and mood from in-store shoppers, helping the retailer adapt their marketing and customer service strategies accordingly. \u201cBy providing our software, we can help retailers develop their own applications,\u201d a company spokesperson told FOCUS.<\/p>\n

The tech has also allowed non-traditional players to enter the \u2018Smart Retail\u2019 market by creating unstaffed, cashless stores. In-store at one of BingoBox\u2019s 158 Chinese outlets, items are identified via cameras utilising sophisticated image recognition technology and purchased using the customer\u2019s Alipay or WePay app. Similar methods have also been employed by Tencent, which launched its own unstaffed and cashless store last year, as well as start-ups such as TakeGo and Fxbox.<\/p>\n

Alibaba has gone one step further. Having already entered the market with 2016\u2019s \u2018Tao Caf\u00e9\u2019, the tech giant last September collaborated with KFC by introducing a \u2018smile to pay<\/a>\u2019 service. Integrated within the company\u2019s Alipay payment app, customers are scanned and required to smile to confirm their payment.<\/p>\n

KFC\u2019s smile to pay service, required customers to smile to confirm their payment<\/p><\/blockquote>\n

Elsewhere, Shenzhen-based start-up Malong Technologies<\/a> has found great success applying deep-learning AI technology to product analysis. By processing petabytes of data, the equivalent to the entire photo catalogue currently stored on Facebook, Malong\u2019s AI has achieved human-level analytical precision that can be applied to the retail and e-commerce sectors as well as in manufacturing and security.<\/p>\n

For e-commerce giants such as Alibaba and JD.com, the technology provides much-needed additional protection for consumers against fraud and counterfeit. By analysing product images, AI bots are able to spot cheap knock-offs and fakes and notify both the customer and platform provider before any damage is done.<\/p>\n

Not satisfied with already possessing the world\u2019s most developed e-commerce environment, as well as a rapidly growing retail industry, innovation provided by AI will further boost China\u2019s economic standing. The impact is already evident with Alibaba\u2019s record-making US $25 billion \u2018Singles Day\u2019 sales being attributed to the use of AI in customer service and marketing. It is therefore perhaps unsurprising that a recent PwC report estimated that, by 2030, AI could boost Chinese GDP by up to 26 percent.<\/p>\n

Opportunities within the market are not limited or restricted solely to Chinese firms, and, with a burgeoning AI industry, UK companies may also stand to benefit. For Mark Hedley, CBBC<\/a>\u2019s Senior Director for ICT, Britain is in position to become a key partner in AI with China: \u201cThe UK\u2019s recently announced AI Sector Deal<\/a> looks set to sustain the growth of the sector. This links directly with China\u2019s own plans to use AI technologies as a key growth driver, creating new opportunities for collaboration between the two countries\u201d.<\/p>\n

This readiness for cooperation is reflected by the upcoming UK mission to Guiyang that, for Hedley, \u201crepresents the best in British innovation, including healthcare AI, machine learning, video analytics, cybersecurity and more. Building on 2017\u2019s UK-China Big Data Collaboration, the delegation will help cement UK-China ties in innovation\u201d.<\/p>\n

However, while UK firms such as Deepmind<\/a>, Babylon<\/a> and Benevelont.AI<\/a> have already had a major impact on the global AI scene benefitting from the scientific resources Britain possesses,[9]<\/a> China has its own unique attraction for foreign start-ups. This is a point raised by David Bian, the Strategic Alliance Manager at the UK multinational company ARM\u2019s Shenzhen base. \u201cWhile innovation and R&D is strong in the UK, China provides the opportunity for application,\u201d Bian states. \u201cIn addition, the Shenzhen government is very efficient when it comes to innovation. Things are being updated all the time, faster than in the UK.\u201d<\/p>\n

ARM\u2019s own Accelerator and AI Ecosystem Consortium (AIEC), have provided one such opportunity for growth by providing both Chinese and foreign AI start-ups with resources. BAT, in their position as \u2018national champions\u2019 have also established platforms that promote cooperation and competition in the field and access to the companies\u2019 massive pools of data.<\/p>\n

UK companies may also be in the advantageous position to provide what some Chinese facial and vocal recognition companies lack \u2013 a variety of data. \u201cCurrent drawbacks for us include the lack of difference between faces and languages occurring in Chinese realtime data,\u201d a SenseTime spokesperson stated. \u201cThere definitely lies an opportunity for UK companies to collaborate to improve our respective capabilities.\u201d<\/p>\n

\"\"

While innovation and R&D is strong in the UK, China provides the opportunity for application<\/p><\/div>\n

However, the AI industry carries with it perhaps more concern over Intellectual Property (IP) leakage than almost any other, with Chinese companies especially cautious. Any UK company seeking Joint Venture or market entry opportunities must take this into account.<\/p>\n

As facial recognition technology becomes increasingly advanced, worries over data protection have grown, with recent events at Facebook and Cambridge Analytica emphasising concerns. While China has established previously non-existent Data Protection and Cybersecurity Laws, they are, at best, a work in progress, with major issues related to clarity and regulatory responsibility threatening to put prospective UK partners off from entering the market.<\/p>\n

The definition of \u2018personal information (sensitive)\u2019 and \u2018important data\u2019 in this context is particularly troublesome and something Bian alludes to: \u201cBAT [and others] are only collecting unsensitive data, although what constitutes sensitive and unsensitive may be slightly different in China and abroad\u201d.<\/p>\n

This remains the key concern, and the schism partitioning data attitudes may be set to widen as the EU\u2019s General Data Protection Regulation (GDPR), coming into force in May of this year, explicitly labels biometric data, the key source of China\u2019s \u2018Smart Retail\u2019 revolution, \u2018sensitive\u2019 in the realm of retail and e-commerce.\u00a0This may have a direct influence on how AI technology develops in China and the West.<\/p>\n

China\u2019s impressive growth has been built on the back of detailed roadmaps designed to deliver commercial success and AI is no exception. Supported by huge pools of biometric data, the major BAT tech firms have created a platform and network to innovate the already well-developed retail and e-commerce industries. While concerns surrounding data protection and privacy rights remain, Chinese enthusiasm for vision-based AI solutions threatens to leave the West behind. UK tech companies, backed by ambitious new government plans, would provide the perfect partner with which to take the next step.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

New facial recognition technology is shaping China\u2019s retail industry but it\u2019s having to write the rules as it goes along, writes Jake Mendrik, Facial-recognition technology is central to the current Artificial Intelligence (AI) boom taking place in China. In recent months, three of the country\u2019s vision-based solution start-ups have attained \u2018unicorn\u2019 status, with market valuation of at least USD $1 billion. No other country can claim to have a single…<\/p>\n","protected":false},"author":38,"featured_media":2679,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[124],"tags":[248,250,275,2427,181],"class_list":["post-2694","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology","tag-ai","tag-big-data","tag-facial-recognition","tag-paywall","tag-retail"],"yoast_head":"\nFacial recognition software is used across China's retail sector but what about privacy laws? - Focus - China Britain Business Council<\/title>\n<meta name=\"description\" content=\"A huge volume of big data companies, smart AI and a lack of regulation makes China the perfect proving ground for facial recongition software.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/focus.cbbc.org\/facial-recognition-software\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Facial recognition software is used across China's retail sector but what about privacy laws? - Focus - China Britain Business Council\" \/>\n<meta property=\"og:description\" content=\"A huge volume of big data companies, smart AI and a lack of regulation makes China the perfect proving ground for facial recongition software.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/focus.cbbc.org\/facial-recognition-software\/\" \/>\n<meta property=\"og:site_name\" content=\"Focus - China Britain Business Council\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/chinabritainbusinesscouncil\" \/>\n<meta property=\"article:published_time\" content=\"2018-06-16T06:04:50+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-04-23T10:21:02+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2018\/04\/shutterstock_683752018.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"669\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Elinor Greenhouse\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@ChinaBritain\" \/>\n<meta name=\"twitter:site\" content=\"@ChinaBritain\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Elinor Greenhouse\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/focus.cbbc.org\/facial-recognition-software\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/focus.cbbc.org\/facial-recognition-software\/\"},\"author\":{\"name\":\"Elinor Greenhouse\",\"@id\":\"https:\/\/focus.cbbc.org\/#\/schema\/person\/e9467e4f57bfab6faebe36d3d318fc19\"},\"headline\":\"Facial recognition software is used across China’s retail sector but what about privacy laws?\",\"datePublished\":\"2018-06-16T06:04:50+00:00\",\"dateModified\":\"2025-04-23T10:21:02+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/focus.cbbc.org\/facial-recognition-software\/\"},\"wordCount\":1309,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/focus.cbbc.org\/#organization\"},\"image\":{\"@id\":\"https:\/\/focus.cbbc.org\/facial-recognition-software\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/focus.cbbc.org\/wp-content\/uploads\/2018\/04\/shutterstock_683752018.jpg\",\"keywords\":[\"AI\",\"big data\",\"Facial recognition\",\"Paywall\",\"Retail\"],\"articleSection\":[\"Technology\"],\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/focus.cbbc.org\/facial-recognition-software\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/focus.cbbc.org\/facial-recognition-software\/\",\"url\":\"https:\/\/focus.cbbc.org\/facial-recognition-software\/\",\"name\":\"Facial recognition software is used across China's retail sector but what about privacy laws? 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