China’s service robot market size jumps 44% to $1.8 billion

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China’s service robots market hit $1.84 billion according to an article published today on the 21st Century Business Herald. This marks a nearly 44% year-on-year increase, which is higher than the global average rate of change.

Traditional sectors are turning to automation to increase efficiency and slash labor costs, key among them the medical and education industries. The food service and catering industry is lagging behind but shows great promise in the future, according to an August 2018 report by the Chinese Institute of Electronics. Companies involved in the automation of dining are mostly in Series A and B funding rounds.

Unmanned and automated restaurants are starting to emerge in China. Chinese online retailer JD opened its first “JD X future” restaurant in Tianjin last November and plans to open 1,000 more by 2020. The restaurant is fully staffed by robots which take orders, serve food and prepare the meals, managed by a central AI system. Last July, Chinese e-commerce giant Alibaba opened its own automated restaurant, called “Robot.he,” inside its Hema supermarket. It plans to expand overseas. Popular hot-pot restaurant chain Haidilao equipped a Beijing branch with robotic arms in their cold rooms, as well as transportation robots.

The maturing of AI and human-machine interaction technologies, coupled with a rapidly ageing population are expected to steadily increase the demand for service robots. ResearchInChina, an independent business intelligence research firm, projects the market will continue to expand by 20% annually in the next few years, reaching a total valuation of $4.9 billion in 2022.

Chinese government policies incentivize the development of AI, automation, and robotics. In 2016, authorities released the Robotics Industry Development Plan, outlining targets and strategies for growing the robotics industry in the next five years. PWC predicts that China will be the biggest winner from the application of AI worldwide. Adopting these novel technologies will lead to a 26%  boost in China’s GDP by 2030, whereas, on average, world GDP will rise by 14%.

Experts agree that the wide adoption of robots and automation will inevitably disrupt the labor market. Another PWC report estimated that around 26% of existing jobs in China could be displaced by automation over the next 20 years—a figure higher than many countries. However, the report suggested the job loss will be offset by additional jobs provided by AI and related technologies; robots, drones and autonomous vehicles. The transition into automation will give China’s job market a net boost of 12%, the report concluded.