As the month of May drew to a close, some residents in Beijing (yet again) awoke to the view of delivery robots inching their way through their streets. The local government of Beijing had recently granted official permits to JD.com, Meituan, and Neolix, enabling them to run driverless delivery services in designated areas of the Daxing district.
The concept of driverless delivery units is not new to China– but they have bolted into the limelight in the past two years because of the pandemic. With governments stressing the need for minimizing physical contact, the neighbourhoods stranded under movement restriction orders became an unintended testing ground for such delivery operations.
When the cities of Beijing and Wuhan were under lockdown, Meituan and JD.com deployed delivery robots to deliver food and medical supplies on a limited set of public streets.
What makes this set of delivery services different, however, is its scale and commerciality. These services are no longer confined to a couple of streets; the delivery radius now comprises a designated area of 225km2, a 143-km stretch of highway, as well as the entire Daxing International Airport. More importantly, JD.com, Meituan, and Neolix can now charge their clients for these driverless services.
That being said, the timing of this move still seems unexpected. COVID-19 is under control in China. The country’s no longer in lockdown. Why would JD.com and Meituan turn towards delivery robots– especially when they can call upon fleets of delivery drivers?
“Future-proofing” their businesses
Our guess is that companies such as Meituan and JD.com are trying to “future-proof” their businesses.
It’s the same reason why many tech companies are entering the electric car manufacturing business (with Huawei being the latest entrant). Call it a “zero-sum game”, call it FOMO – none of these firms wish to be remembered for missing out on the next big innovation.
In other words, it’s better to overpay for a mediocre slice of cake than to have overlooked a delicious one altogether.
None of us can predict if driverless delivery robots would take off in ecommerce. While the pandemic has underscored its potential and catalyzed its development, we still don’t know if its functions are too niche. But it’s always better to be safe than sorry.
The optics of a pandemic
Which brings us to the second half of our question: Why now?
At the end of the day, it doesn’t matter that China has already stepped out of its lockdown. It also doesn’t matter that life in the country has assumed a guise of ‘normalcy’, with most people reverting back to the grinds and grooves of their pre-pandemic lifestyles. What matters is the perceptual salience of the pandemic.
With the number of COVID-19 infections yet to peter out in most countries, the pandemic continues to percolate through our socio-economic reality. Most people cannot escape a conversation without alluding to it, which makes it more likely for them to recognize the viability of driverless delivery units.
In a post-pandemic era (fingers crossed), it would be much more difficult for people to visualize the use of these robots– and much easier to dismiss it as gimmicky. As such, while COVID-19 is still active in our consciousness, it makes sense to pilot driverless delivery robots on a commercial level.
Striking while the iron is hot– clever marketing.
Yes, we need more robots … in logistics
While these autonomous delivery units catch the eye with their futuristic design, their immediate application may lie in a less glamorous direction.
As the scale of ecommerce continues to grow in both Southeast Asia and globally, the increased flow of goods will create increased strain on our supply chains and logistical capabilities. Companies will expect their workers to move more items, more quickly, and more efficiently.
That might be where we most need these driverless delivery units for. The vacuum-like automated guidance vehicles (AGVs) are already a common sight in the warehouses of Alibaba and more. Maybe it’s time to add these delivery robots into the equation as well.
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Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].