Pudu Robotics, a Chinese startup that manufactures robot waiters, is embarking on its next phase of growth, fueled by global demand for labor-saving machines.
“We plan to build two factories in the Yangtze Delta area [near Shanghai], and we have already begun construction,” said Felix Zhang, founder and CEO, in an interview at company headquarters in Shenzhen.
Work on the two sites will finish between 2024 and 2025, tripling Pudu’s annual capacity, Zhang said.
Since its 2016 launch, Pudu has grown to become a unicorn pulling in around USD 100 million in revenue in 2022. Customers include Chinese hot-pot chain Haidilao, along with Burger King and KFC restaurants in Europe.
In Japan, Pudu delivered 3,000 robots to restaurant operator Skylark Holdings through the end of 2022. They serve roughly 2,100 locations.
Pudu’s current plant in the city of Dongguan has an annual capacity of roughly 50,000 units. The two new ones will bring the total to about 150,000.
Zhang did not elaborate on precisely where the plants would be or how much would be invested.
Pudu constantly improves the precision of motion by its robots by acquiring big data from units already in service. It has access to a large supply of affordable components in China, keeping production costs down.
“We’re not thinking about building a plant offshore at the moment,” Zhang said.
Overseas demand is the main reason for the ramped-up output capacity. Pudu had cumulatively delivered some 70,000 robots through the end of August, including ones handling room service at hotels.
More than 10,000 have been delivered since February. Overseas clients account for around 80% of Pudu’s sales.
Pudu has delivered roughly 7,500 units to Japan and is believed to have captured the top market share in robot waiters.
South Korea and the US also placed many orders. Pudu has sold robots in markets as varied as Germany, Canada, the United Arab Emirates, and Saudi Arabia.
Pudu has arms in Japan, the US, Singapore, and the Netherlands, and is preparing to establish a new unit in South Korea.
In total deliveries, “we don’t have a precise goal, but I expect to exceed 100,000 units in the next few years,” Zhang said.
“We’re the top Chinese robot waiter company in terms of overseas sales volume, and the likelihood is that we’ll be able to maintain that position moving forward,” he said.
Restaurants account for 50% to 60% of all Pudu’s deliveries. The startup also sells cleaning robots in addition to hotel robots.
The global market for service robots will grow 33% this year to USD 33.7 billion, according to Chinese research firm AskCI. The domestic market alone is seen expanding by 36% to USD 10.3 billion.
“Demand for robots will grow because of the aging population and the labor shortage,” said Song Xiaogang, executive director and secretary-general of the China Robot Industry Alliance.
Competition for a piece of this growth market is stiff. Shanghai-based Keenon Robotics is strong in China and is preparing to step up its overseas expansion.
Keenon sold roughly 35,000 units through the end of 2022, with nearly 10,000 units crossing the border. The company plans to triple to quintuple cumulative sales volume by the end of 2025.
Keenon had 60.4% of the Chinese market in restaurant robots in 2022, according to research firm IDC, with Pudu in second place at 23.2%.
In Japan, SoftBank Robotics sells the Servi robot waiter made by a US startup. Tokyo ventures Connected Robotics and TechMagic have developed cooking robots.
However Japanese manufacturers have struggled to capture market share among robot waiters, with commodification having made it complicated for developers to stand out.
Hiroya Nakano, CEO of Tokyo consultancy QBIT Robotics, does not believe that Pudu’s robots have overwhelming advantages.
“Compared to Keenon, Servi and similar offerings there is no great difference in serving capabilities,” Nakano said, adding that Pudu’s robots “are selling because of the peace of mind from big-name companies such as Skylark Holdings using them.”
Pudu in 2022 undertook what Zhang called a “strategic adjustment” that shrank the staff. It has not publicized how many workers were let go, but the headcount now stands at around 500.
“Business has normalized, and we are generating profit,” said Zhang, who offered reassurances that no more downsizing is planned.
Expanding sales will require increasing both staff and capital spending. An approach to fundraising, such as a stock market debut, will be the next challenge for attaining sustainable growth.
“There’s still no plan to go public, but we’re keeping the option open,” Zhang said.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.