Chinese robot transport startup enters ‘last mile’ delivery race

Segway-Ninebot readies for IPO after a successful roll-out of autonomous vehicles.

Source: Photo by Johny vino on Unsplash.

BEIJING — The explosive growth of e-commerce and food delivery services has challenged the global logistics industry to trim costs, especially over the final leg of shipments, commonly referred to as the “last mile.”

Chinese startup and IPO hopeful Segway-Ninebot thinks it has the solution: autonomous delivery robots.

While the average parcel price for home deliveries in China has dropped to RMB 11.9 yuan (USD 1.66) from 24.6 yuan over the past few years, the average cost per driver has risen to between 1 yuan and 1.5 yuan. Reducing this expenditure is now a top priority.

Established in 2015 through the acquisition of Segway Inc. — U.S. manufacturer of the once-promising two-wheeled personal transporter — the Chinese startup first focused on developing scooters and service robots equipped with artificial intelligence.

It has since expanded into the logistics field, releasing its Segway S1 delivery robot last year in a tie-up with Chinese food delivery operators Meituan-Dianping and Ele.me. In August, the startup rolled out its second-generation Segway S2 robot for indoor use along with Segway X1 for outdoor deliveries.

Segway S2 is designed for short trips around offices, department stores, hotels, hospitals and other indoor facilities. For industrial parks, school campuses and other outdoor environments, Segway X1 employs an autonomous navigation system to deliver parcels.

Segway-Ninebot has investors excited. In October 2017, it raised USD 100 million in a Series C round, helping push its current valuation to more than USD 1.5 billion.

The company employs a large number of engineers, with many engaged in developing a visual simultaneous localization and mapping algorithm, or VSLAM, which is indispensable for path planning and obstacle avoidance. It is also working on advanced computer vision technology, and has devised its own three-dimensional, automated positioning and mapping system.

These achievements have resulted in delivery robots that can identify obstacles and operate for many hours. In addition, the entire delivery process can be controlled and monitored remotely, reducing labor fees.

To further cut costs, Segway-Ninebot has its own supply chains for production of Segway S2. According to company officials, this reduces the robot’s cost by 30% compared with similar vehicles from its rivals.

Trials of the Segway-Ninebot delivery robots are already underway at a number locations in Beijing and Shanghai, involving door-to-door parcel delivery and food delivery during peak hours. So far, the tests have covered nearly 5,000 km and have demonstrated a drastic reduction in delivery costs over the “last one mile” to 0.05 yuan from 1.5 yuan.

Despite its success, Segway-Nineboot is facing stiff competition from U.S.-based startups such as Starship Technologies, Marble, Nuro and Dispatch Robotic, all of which are hoping to meet increased demand from logistics companies for economical and reliable delivery robots.

It is also being challenged in China from other domestic startups, as Alibaba, JD.com, Suning.com and others have announced plans to build fleets of delivery robots for that all-important “last mile.”

Segway-Ninebot hopes to list on China’s Nasdaq-style high-tech board, Star Market, which has already begun screening its application. The company plans to raise 2.8 billion yuan through the initial public offering, with 193 million yuan earmarked for its delivery robot business.

This article first appeared on Nikkei Asian Review. It’s republished here as part of 36Kr’s ongoing partnership with Nikkei. 36Kr is KrASIA’s parent company.