China wants to play a leading role worldwide in the production of unmanned aerial vehicles (UAVs). In December 2017 the government has published new guidelines for the civilian unmanned aircraft industry to support UAV development. The government expects the market value of the industry to increase by an average of 40 percent by 2020 to RMB 60 billion (£7 billion). The long-term growth goals are even more ambitious. By 2025 the Chinese government aims to more than triple the UAV industry to RMB 180 billion (£21 billion).
The new guidelines already had a positive effect on China’s UAV industry. One of the country’s largest online retailers, JD.com, announced a US$ 2.5 billion round of financing for its logistics subsidiary, including investments in automation, drones and robotics. The announcement was made by Richard Liu, Chairman and CEO of the Group in February 2018.
He even got support from Google. The search engine group invested US$ 550 million in JD in June, which was a likely move to improve the company’s standing compared to US logistics leader Amazon. In August 2018, a startup accelerator was announced to support the company’s UAV ambitions.
JD’s drone delivery plans focus on China’s remote rural areas which currently incur high delivery costs. With drone delivery the group wants to be able to deliver goods faster and cheaper to these regions, Richard Liu said in an interview with CNBC. Richard Liu expects that fully automated logistics will reduce costs by 70%.
Chinese online marketplace Alibaba also has made a move towards drone technology. According to the US magazine Popular Science, the e-commerce company has concrete plans to offer deliveries via drones. In tests drones collected meals and other packages in restaurants and shops at Jinshan Industrial Park and flew them to their delivery points. From there, human drivers transported them the last stretch to the customers. “By using planes the delivery services can bypass Shanghai’s crowded streets. This can reduce the total delivery time for customers in the area by over 20 minutes”, reporters observed. In the next few years Alibaba wants to roll out this service to other cities.
This delivery robot can transport up to 300 kilograms.
Chinese drone logistics isn’t solely focused on the last delivery stretch, which can account for more than 50% of the total delivery costs. Long-range drone delivery is another fiercely competitive development area.
According to a report, Alibaba subsidiary Cainiao is working with the University of Beijing on a long-range drone which has a payload of one tonne and a delivery range of 1,500 kilometres. First tests have been scheduled for 2020 and it is scheduled to be put into services by 2025. Meanwhile JD is developing a similar project with a 300 kilometre flight radius and a payload of one tonne.
UAV delivery on the road is comparably easier to design and implement. Traveling delivery robots are long commonly used in China and are part of the automated supply chain: JD’s carry a payload of up to 300 kilograms in 30 parcels, drive 15 km/h on bike lanes, stop at red lights and orientate themselves with their radar sensors.