Merchant Innovation

The Drone Race For Rural Chinese eCommerce

Though the People’s Republic of China lays claim to some of the most densely populated urban centers in the world, just 54 percent of the most populous country’s citizenry calls one or another of its cities home. That leaves about 600 million people unevenly spread across the remainder of China’s 5.8 million square miles, and they all have the same appetite for eCommerce as their city-dwelling brethren.

That’s why instead of waiting for modern infrastructure to catch up, eRetailer JD.com is bringing drone deliveries to the inland river plains and mountain ranges of China — whether consumers are ready for them or not.

The Wall Street Journal has the story of China’s second-largest eCommerce company racing to widen its logistical footprint away from the major cities along the country’s coast. Instead of going the airborne route, why wouldn’t JD.com opt to use its existing fleet of delivery trucks? While those vehicles might be able to move efficiently in cities, WSJ noted that China’s interior is characterized by remote villages and hamlets connected by narrow and often unpaved roadways — even the last mile can sometimes take one-lane footpaths between rice paddies and farmland. While JD’s trucks can certainly make the trips if need be, the geography of inner China demands a new piece of delivery equipment to achieve the same level of delivery speed and efficiency that JD and its chief rival, Alibaba, exhibit in China’s cities.

Josh Gartner, a spokesman for JD.com, told Quartz that his company has begun to compliment its normal delivery services in rural areas with the spot use of drones for shipments to villages trucks it would otherwise struggle getting to. Even though JD’s drones aren’t yet dropping packages off in customers’ backyards, the flying machines can ferry orders to rural distribution centers, which are then swiftly carried to their final destinations by human couriers.

What’s more is that these drones don’t have to embark on multi-hour flights over stretches of uninhabited terrain. In many cases, the use of a drone for trips to distribution centers just over six miles of difficult roads can be a massive time- and resource-saver.

“What we’ve discovered is that the places that are very hard to get to, they aren’t far from more developed areas,” Gartner told Quartz.

However, if JD.com, Alibaba and other Chinese eCommerce brands want to leapfrog the road-building stage of infrastructure development, they’ll have to confront other consumer behavior issues as a result. Quartz reported that JD.com spent much of 2015 hiring and training about 150,000 “village promoters,” who not only monitored deliveries for speed and accuracy but also taught their neighbors and fellow villagers how to set up an account and start ordering from JD.com.

As expected, JD’s drone program is, at best, burgeoning. Drones can only carry a single package at a time, and their flight distance capabilities still leave something to be desired. However, eCommerce experts are arriving at the consensus that drone-based deliveries aren’t just a quirky tech luxury; in a few years’ time, they’ll be required processes in rural China, urban America and everywhere in between.

“Every company that touches or deals with logistics and transportation probably needs to actively or passively have some kind of drone strategy,” Guy-Frederic Courtin, vice president and principal analyst at Constellation Research, told ZDNet. “Now is the time.”

For American retailers, functional drone programs can help merchants win the war of same-day delivery; for Chinese eCommerce giants, drones can help them win the war for the as-yet-undecided 600 million shoppers outside of its cities.

Or, like a poorly built drone, they might see themselves crash and burn in the process.

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