JD.com started to test drone delivery service from a farming village in West Java to a nearby elementary school from January. Drone delivery is expected to bring benefits to Indonesia, which has many islands and some farming villages that lack logistics infrastructure. The Chinese company has already launched an online shopping site in Indonesia, and it is expected to introduce a drone delivery service in the future.
The company debuted its first drone delivery service in Jiangsu Province and other rural areas in China in 2016. In September 2018, the company's first-ever drone delivery of Shanghai crab drew attention. JD.com determined it can capitalize on its expertise overseas, given its drone has traveled a total of 120,000 km. The company also announced on Feb. 21 that it would partner with Japanese online retailer Rakuten to launch unmanned delivery service in Japan.
Alibaba has continued to make large investments in logistics in China. It has introduced know-how in information technology and AI into its logistics management.
A key part of Alibaba's technology is a flat, 30-by-30 cm robot on wheels. A large number of the robots move around the company's distribution depot in the eastern Chinese city of Wuxi, sorting goods on a floor where no humans are working. They move as if by their own will.
An AI system tracks the movements of every item inside the warehouse in real time. Around the clock, it tells the robots where to store items and on which trucks to load them.
Some 600 million shoppers per month use Alibaba's online store. Large amounts of personal information are collected every day, including their addresses, purchase history and spending per purchase, all of which is managed by the system.
By analyzing the big data, the system forecasts what products are in demand and where in China, so that inventory is optimally controlled and goods are delivered on the most efficient schedule and routes.
Five years ago, it took nine days for Alibaba to deliver 100 million packages to locations across China. Today, it takes just 2.6 days. The company has expanded the urban areas in which goods are delivered within 24 hours of the order.
This kind of technology should be useful in markets overseas.
Alibaba is expanding business overseas. It plans to build large distribution depots in countries including Malaysia and Belgium, and has bought a major online retailer in Southeast Asia. It aims to eventually deliver goods in under 72 hours to anywhere by building distribution depots in strategic locations worldwide.
Online retail is likely to grow fast in emerging Asian countries where more people are using smartphones and income levels are rising. In anticipation of growth, Alibaba is making investments in advance, as developing a distribution infrastructure is key to success in this business.