Is China’s Coronavirus outbreak an incentive to fast-track drone deliveries?
INNOVATION is often born out of adversity — and although drone deliveries aren’t new, experts are beginning to debate whether the Coronavirus outbreak in China should motivate lawmakers to fast-track drone deliveries.
China is digital. Shopping and payments are digital and demand for food-delivery services has been steadily rising since 2016. It’s what has helped the country’s digital economy to grow to CNY27.2 trillion (about US$3.8 trillion).
The deadly virus, however, is causing great distress in the country. Since people are worried about contamination, e-commerce deliveries and online food deliveries are struggling to meet demand. There’s not enough labor available which has naturally pushed prices up in the country as well.
Demand is, of course, high since millions of people are stuck at home since the Chinese New Year.
Digital leaders such as Alibaba, JD.com, and Meituan are working on contactless delivery whereby parcels are left at designated areas for collection by customers. However, it’s not really effective and is causing concern to investors.
According to Reuters, Meituan’s shares are down by 11 percent since mid-January, just around the time the first cases of Coronavirus — and the severity of the outbreak — came to light.
The losses and challenges raise questions about the development, maturity, and feasibility of deployment of drones for commercial purposes in China, including for deliveries.
The reality is that Chinese companies such as Alibaba, China Mail, and China Post have been experimenting with drone deliveries for a while now — since early 2016, which is when China Mail made its first delivery.
In 2017, Alibaba announced that it was ready to make drone deliveries to Meizhou island — to cut the travel time significantly and deliver boxes of fruit more quickly and possibly at a lower price (when scaled up).
The initial shipment involved three drones carrying a total of six boxes of passionfruit with a combined weight of around 12 kilograms that flew from Putian in east China’s Fujian Province to nearby Meizhou Island.
Truth be told, the technology is ready and ripe for commercialization — but in the absence of regulations, deployment at scale isn’t feasible.
If regulators were to step in and put a framework or law in place and provide some sort of guidelines around safety, security, and privacy, drone technology could take flight immediately.
If the Coronavirus outbreak kicks-off the launch of the technology, then China could race past the US and create significant new opportunities for every player in its digital economy.