Meituan, the Tencent-backed food delivery and lifestyle services platform, is testing a fully automated warehouse for order fulfillment service, it said on Monday.
The initiative will help the company optimize delivery times as retailers push forward into smart warehousing, an area of technological development poised for growth in the world’s second-largest economy. Backed by big data, the system optimizes inventory according to consumer preference in a certain region, prioritizes order packing, and assigns tasks to deliverymen.
A company spokesman told TechNode that Meituan is planning to connect the unmanned warehouse with autonomous delivery vehicles which will send the parcels directly to the users for a fully automated system, but the technologies had not yet reached maturity.
Meituan joined China’s grocery delivery vertical with Meituan Maicai in March. Its foray into intelligent warehousing further intensifies competition with e-commerce giants Alibaba and JD.com to control the logistics sector. Both of Alibaba and JD have already launched their smart warehouse solutions which feature autonomous guided vehicles (AGV) and various internet of things (IoT) technologies.
The company plans to roll out the service to sellers on Meituan Instashopping, an on-demand grocery delivery service that promises 30-minute delivery. A company spokesman said that the project will be tested in Meituan’s headquarters “very soon” but declined to offer further details about when it will be open for merchants. No price or cost of the services was disclosed.
The initiative is being tested in a simulated environment. The test space is 40 square meters which accommodates 400 product categories with up to 10 items in each, the spokesman told TechNode. The warehouse can handle around 150 orders at peak.
For Meituan’s Instashopping, automatic arms will pick up items from inventory shelves after receiving the orders, and then hand the commodities to AGVs for automatic packing. The automated picking and packing process, which can run 24 hours a day, is seven times more efficient compared with the traditional process that uses manpower, according to the company. Unmanned operations also means that space is used four times more efficiently thanks to higher shelves which can be positioned more closely together.
China’s booming e-commerce industry has spawned lightening-fast express deliveries and, consequently, customers with high expectations. Many Chinese online consumers dislike deliveries that take longer than overnight, even if it involves crossing the country.
As Chinese tech giants expand into groceries, consumers expect speedy deliveries for categories such as fresh produce, which can arrive in a matter of minutes. One user in southern China’s Foshan City received his package 13 minutes after placing the order.
Meituan’s investment in the smart warehouse project will mainly focus on research and development, and the company says it will consider cooperating with the traditional retailers in the future.
E-commerce companies are ramping up efforts to automate the supply chain and logistics sector. Meituan rolled out an autonomous delivery platform for its core food delivery service in 2018.
Alibaba’s Cainiao Logistics showcased its first Cainiao Future Park, featuring a warehouse system designed for a large number of robots to work collaboratively, and sensors automate water, electricity, temperature, and humidity monitoring.
JD built last year a new Shanghai fulfillment center that can organize, pack, and ship 200,000 orders a day with only four employees to assist robots.
Meituan says that its autonomous warehouse solution differs from those of competitors like JD, where orders are picked and processed by a human, while Meituan’s service is fully automated from picking up to packing, according to the company.