As the autonomous vehicles are expected to deliver 80% of all goods in less than a decade, Chinese giant JD.com and the Japanese peer Rakuten combine forces together to provide unmanned deliveries in the Land of the Rising Sun
After the Sino-Japanese agreement in the mobile payment sector that has brought China’s undisputed leader Tencent with Japan’s giant Line together, recently, Beijing and Tokyo combined forces again in the e-commerce field.
Last February, Chinese and Japanese major marketplaces, JD.com and Rakuten, announced to have signed a collaboration agreement to commercialize unmanned delivery services in Japan.
Actually, Rakuten will employ JD.com’s drones and unmanned ground vehicles (UGV) to improve Japan’s e-commerce sector saving the time, cost and labor involved in products deliveries.
“By utilizing JD.com’s drones and UGVs with the unmanned delivery solutions created by Rakuten, we hope to accelerate innovation in the Japanese logistics sector and contribute to building a society that can offer greater convenience to all citizens,” said Koji Ando, Rakuten Group Managing Executive Officer.
Therefore, on one hand, the Japanese giant will use JD.com’s know-how to improve its own service. But on the other hand, the Chinese firm has now the chance to enter the Nippon explosive market thanks to Rakuten’s brand awareness in the country.
Although the two companies are already testing the process, experimental last-mile drone shipments of products purchased by Rakuten’s customers will start in April leveraging the Chinese second-largest e-commerce company’s robots equipped with cameras and sensors for self-navigation.
© Unsplash. Chureito Pagoda, Fujiyoshida. Japan represents a special location to test and improve drones deliveries due to the vast presence of mountainous areas and remote islands.
Rakuten Inc. is not only an e-commerce phenomenon at home, but it is actually a global innovation company in cross-border e-commerce, communication, and also fintech.
Based in Tokyo, the firm was founded by Hiroshi Mikitani in 1997. Today, it is the largest marketplace in Japan and one of the world’s largest by sales. With over one billion users around the world, Rakuten operates in as many as 29 countries.
The company’s expansion outside the Japanese market started in 2005 with the acquisition of many international digital companies such as Viber, Kobo Inc., and Buy.com.
Rakuten has already been offering drone delivery in Japan since 2016 leveraging the collaboration with corporate partners and local governments. Then, in 2018, the company launched unmanned vehicle trials combining drones with UGVs deliveries.
Nevertheless, although it has over 20 years of experience with commerce and IT, the brand has claimed to aim to “accelerate the development and commercialization” of the last-mile delivery service and the logistics sector in the Land of the Rising Sun.
Therefore, to speed up the development, Rakuten decided to go straight to the world’s leading company in hi-tech delivery.
JD.com Inc. – also known as Jingdong 京东 – is the leading technology-driven e-commerce company and one of the two largest online retailers in the Middle Kingdom. As well as its peer from Japan, the company’s origins come from the ‘90s being found by Liu Qiangdong in 1998.
It is now partly owned by the Chinese giant Tencent, which helped the company to gain over 300 million active users and over $22 billion in revenue during the last Single Day on November 11.
Today, JD.com is the world’s leading company in hi-tech delivery through autonomous technology owning the largest drone distribution infrastructure in the world. But at home, the company also rule semi-automated warehouses, supermarkets, and robot-run restaurants.
According to the company’s Vice President Xiao Jun, JD.com operates more than 100 drones and 50 UGVs in China claiming to have racked up 400,000 minutes of delivery flight time.
However, although in China JD.com is an undisputed leader, it actually does not have an e-commerce business in Japan. “This is our first partnership with a Japanese company. There will be more, and it will expand to areas like warehousing and retail,” said Xiao Jun.
The goal to expand in the Nippon market is driven by the increase of digital competition in the PRC. Being China’s second-best with the e-commerce giant Alibaba controlling more than half of the market, JD.com also suffers from the rising competition with Pinduoduo.
In order to expand the business, in 2016, Jingdong launched the world’s first commercial drone delivery in some Chinese rural areas as the only company with a regional license to deploy drones for logistics in the country.
In addition, in January 2019, the firm announced the success of its first government-approved drone test flight in Indonesia, opening the door for future commercial drone use in the Southeast area.
The company is striving to expand its robotics business internationally, and Japan plays an important role in this expansion as its mountainous areas and remote islands offer many windows of opportunity for drone deliveries.
On the ground, instead, its UGVs are commonly used and tested in many China’s urban areas such as the provinces of Sichuan, Shaanxi, Jiangsu as well as in Beijing, with also two smart delivery stations in Changsha and Hohhot, respectively in Hunan and Inner Mongolia.
© JD.com. Recently, the Chinese firm started to test not only unmanned delivery services but also drones delivery airports.
As mentioned above, it is not the first time a Chinese firm partners with a Japanese giant to combine forces in the international market. Actually, this is a rediscovered trend that is increasing since Japanese Prime Minister Shinzo Abe landed in Beijing last October.
In the occasion of the 40th anniversary of the Treaty of Peace and Friendship, the two Asian powers met and established a renewed relationship after many years of silence. 2018 is, in fact, considered the year of “grassroots reconnection” between the two neighbors and experts say this trend is going to continue in 2019.
Beijing and Tokyo became the second and third largest economies in terms of GDP, and the two countries are finally showing signs of cooperation in many fields, thus improving bilateral relations and driving the “Asian Century” growth.
The Chinese initiative to rebuild a modern Silk Road with the Belt and Road initiative caught the attention of the Japanese leader, glimpsing a lucrative opportunity for Japanese companies that aim to expand abroad.
Moreover, both Chinese and Japanese customers are extremely important for the two countries’ domestic brands. Japanese cosmetics and Tokyo fashion are a real trend in China’s marketplaces while Japanese people appreciate the Dragon’s food and lifestyle.
As the appreciation and interest among companies from both the countries rise, the common fear of new US policies serve as leverage to build partnerships that not only will bring East Asia at the center of world trade talks but that will also lead major domestic firms to further expand their markets.
However, this renewed Tokyo-Beijing axis is possible also thanks to a rising cross-border e-commerce environment. The kind of environment that led Rakuten and JD.com to grow domestically and that is now helping their partnership to grow internationally.
Autonomous vehicles are expected to deliver 80% of all goods in less than a decade. Therefore, Rakuten and JD.com’s push for unmanned aerial vehicles is part of a worldwide trend, which will revolutionize the whole delivery process.
This revolution, as well as many other technological trends, is led by the Eastern region of the world. But this time, it is the Dragon and the Land of the Rising Sun to strengthen forces together.
JD.com know-how and Rakuten’s market are not only building a stable and efficient service in the Nippon region, but they are also launching a Sino-Japanese partnership model, which is probably going to inspire companies in both the nations.
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