Chinese e-commerce company JD.com has revealed the country’s first operational pilot program for drone deliveries, as tech firms compete to reach the country’s untapped rural consumers.
A JD spokesperson confirmed with Technode that the company is using at least two types of UAVs to deliver packages between designated distribution centers in rural areas outside of Suqian in northeast China.
The drones are capable of autonomously loading and unloading packages, and a single flight route manages up to 200 packages a day. The company uses one type of drone for longer-distance deliveries and another to carry heavier packages over short distances.
Current deliveries are up to 15kg each, says the company, which is significant given Amazon’s drone delivery trials are aimed at parcels less than five pounds (2.3kg). JD says the deliveries run over maximum distance of 20km and a top speed of 54km per hour, meaning the longest possible flight undertaken by the service is still under 20 minutes.
The company claims the service halves delivery fees to less than 0.5 RMB (7.5 US cents) per parcel. Currently the drones fly exclusively between depots before being distributed to “village promoters”, who then manage the final package deliveries.
“We have no intention of delivering directly to people’s houses,” the spokesperson told Technode. “For rural areas a lot of the time roads and things are not very good, or it’s too far and it’s just not efficient to send a truck.”
For now the service will be restricted to Jiangsu province. The company cites regulatory restrictions as the main hurdle in expanding the unmanned deliveries to other areas in China, and currently do not have a timeline to launch the service in other locations.
Lowering Logistics Costs To Tap Into China’s Rural Consumers
Drone deliveries are still very much a novel idea in urban China. The country’s overpopulated cities and localized bans on unmanned aerial vehicles make it unlikely that door-to-door drone delivery will be normalized in cities any time soon.
China’s rural areas are a very different story. Vast areas of the country are underserved by traditional infrastructure, leaving consumers cut off from the lighting-quick e-commerce services that buyers in urban centres have become accustomed to.
E-commerce companies, like JD.com and Alibaba, currently work through a series of distribution depots, which can sometimes even act as e-commerce community centers, equipped with tools for customers to both buy and pick up deliveries.
Amid sluggish economic growth, China’s tech firms have renewed efforts to tap the country’s rural consumers, which primarily involves cutting logistics costs. JD revealed their plans to launch drone flights earlier this year. Last month the company also sealed a partnership with robotics company Siasun Robot and Automation Co. Ltd. to build smart robotics systems for their warehouses, including autonomous vehicles.
Alibaba, which operates the country’s most popular e-commerce site, Taobao, has also invested heavily in building out their logistics network. In March this year Alibaba’s logistics affiliate, Cainiao, reportedly raised funds in the vicinity of $1.5 billion USD at a valuation of around $7.7 billion USD.
The same month Alibaba also revealed an ambitious partnership with the China Communist Youth league, a state-sanctioned youth group, to train a million school-leavers in the fundamentals of e-commerce with a view to boost business in China’s rural and regional areas.
Image Credit: Xinhua.com