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JD.com offers $15 million prize for drone delivery contest
BI Intelligence
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JD.com is offering 100 million yuan ($15 million) to the winner of a drone delivery competition, as it looks to enhance its current drone delivery service, the South China Morning Post reports.
Participants are tasked with designing a solution that could enable widespread drone delivery in the country. This competition will likely help JD.com further its plans for drone delivery, potentially aiding in its efforts to design drones that are capable of flying further, and with heavier loads.
JD.com still has to meet safety and airspace standards to gain regulatory approval for drone delivery in the country’s larger cities. Currently, the company doesn’t use its drones to deliver packages directly to customers’ homes. Instead, it uses the drones to fly packages from its regional distribution centers to its network of local couriers throughout China’s villages and smaller cities. This strategy has allowed JD.com to overcome the challenges involved with delivering to China’s more rural areas, which have difficult road conditions, making traditional shipping costly. However, larger cities present new logistical issues, such as the need to avoid crashes with tall buildings, making safety standards more rigorous in these areas.
The online retailer wants to be seen as China's leader in fast delivery, and a more expansive drone delivery network may help it achieve this. It already has a network of more than 250 warehouses and 7,000 pickup locations, and its CEO stated its drones cut delivery costs to less than $1 per shipment, as well as reduced delivery times from hours to 20 minutes. If JD.com is able to expand its drone delivery capabilities to the country's larger cities — there are more than 40 million residents of Beijing and Shanghai combined — it may be able to grab more market share from Alibaba, which it has been steadily chipping away at since 2014.
Jonathan Camhi, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on drone delivery that:
Provides an overview of how drones can transform parcel delivery by automating logistics, particularly for last-mile deliveries.
Examines the efforts of several companies across industries that are experimenting with drone delivery.
Highlights the major obstacles that remain in making drone delivery mainstream.
Provides a timeline for the adoption and scaling of drone delivery services in the US.
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