While many of us in America look to Silicon Valley for innovation, perhaps we need to look even further west as China's e-commerce giant JD.com is leading the way in drone delivery. The company has already delivered packages via drone and last month announced plans to build 150 drone launch facilities for unmanned aerial vehicle delivery (UAV) parcel delivery. They have already secured government approval (which Amazon has had trouble with in the US) in select provinces in China to make deliveries.
JD.com CEO Richard Liu said that the goal of 150 launch facilities is three years away. He said that drone deliveries would reduce cost of shipping freight by 70 percent, compared to conventional truck delivery. The drones can deliver products to some shoppers within 24 hours and will especially improve efficiencies in remote rural areas.
JD.com launched drone deliveries in four pilot cities in 2016 during the run-up to “Single's Day.” There were thousands of trial flights and a portion of those delivered packages to customers.
For those unfamiliar with JD.com, it is the second biggest retailer in China behind only Alibaba. They expect to generate sales of roughly $40 billion in 2017 which would represent 30% year-over-year growth. Walmart is a strategic investor in the company — and just recently increased its holding to 12%.
Amazon stalled by regulation
Amazon announced its ambitions to make drone deliveries back in 2013 but has had issues due to FAA regulations. Regulations in the US require commercial drones to stay within sight of pilots and carry a payload of less than 55 pounds. Furthermore FAA regulations inhibit commercial drones from flying over anybody that is not involved in the transaction.
“China has the edge on the U.S. right now in terms of enabling fledgling drone delivery programs,” says Arthur Holland Michel, co-founder of the Center for the Study of the Drone. “But it is important to remember that both countries are still operating under evolving interim rules for drones.”
For a wide-scale drone delivery program to be implemented, Michel says, “it'll be necessary to have some form of air traffic management system for drones, and more advanced regulations, not to mention better, more autonomous technology that is certified by the aviation authorities.”
Watch this video to see how JD.com delivers via drone: