Entrepreneurship

Hotel delivery robots bring winning edge to Chinese startup

Read more at asia.nikkei.com

BEIJING — In China, where labor shortages and soaring labor costs are increasingly serious problems, robots are replacing redundant, low value-added and sometimes dangerous human work.

Hotels are no exception to this trend. As robot technology continues to improve, the service robots in hotels are attracting attention from venture capitalists and entrepreneurs.

Established in 2019, Shanghai Jingwu Intelligent Technology makes robots, primarily for hotels. The startup’s management and research and development team was once engaged in the robotics business of a listed company and has 17 years of experience in the field.

The company has a number of advantages. First, the R&D team has succeeded in developing and manufacturing the robot’s core components based on years of research. They own the intellectual property rights to these parts, making it easy to connect systems and expand operations. They have also created a cloud platform and back-end management team to support the ecosystem of the robotics industry.

Second, Shanghai Jingwu Intelligent Technology has a large number of key control algorithms. In particular, the algorithm that calculates the robots’ route of travel for deliveries has an accuracy rate of 99.8%. In addition, multiple types of robots and various pieces equipment in the hotel can be linked through its cloud platform.

Third, the company’s robots are deployed in a modular fashion to offer various services, which allows for continuous updates and development of new functions.

The company’s main focus is on hotel delivery robots. These machines deliver food, mail, and amenities ordered by hotel guests through food delivery services. They are also linked to in-room storage spaces, telephones, smart speakers, and other equipment. Guide functions are also a standard feature. Additional customized modules, such as security, privacy protection, and body temperature scans can also be installed. The robots can make 70 to 80 deliveries per day.

Data from a trial installation of Shanghai Jingwu Intelligent Technology robots by Home Inn Selected, a big hotel chain in China, showed that the workload of one robot was equivalent to one hotel staff member and one security guard, reducing labor costs by 9,000 yuan ($1,408) per month. Adding a goods-selling function would increase the labor cost savings by 1,500 yuan per month.

Jingwu Intelligent Technology’s founder is Guo Zhen. After completing an executive MBA from Cheung Kong Graduate School of Business, Guo served as an executive president of a listed company, where he was involved in the launch of a series of companies in the robotics field.

“Our main source of revenue is the dispatch of robots to major hotels, and the annual income from value-added services. We have already established strategic cooperative relationships with major hotel chains such as Home Inn, Jinjiang Hotel, and Dossen, and have already installed our products in nearly 1,000 hotels,” Guo said.

The company expects to expand the number of locations where its robots are working to 3,500 by the end of this year and lift its annual revenue to more than 100 million yuan.

As for Shanghai Jingwu Intelligent Technology’s future plans, Guo said: “With the philosophy of cutting costs and increasing efficiency, we want to enter the real estate management, food and beverage, and medical fields to expand our market share.”

“The key to competition in the field of hotel robots is development and sales,” Guo said. Work is now underway by the development team to optimize and update its delivery robots. Shanghai Jingwu Intelligent Technology plans to release another hotel robot by the end of this year.

The company’s sales team is made up of staff from the hotel industry. This gives Shanghai Jingwu Intelligent Technology an edge in that market. In the first half of 2021 alone, the company’s unit sales are said to have equaled five years’ worth of sales by established robot makers.

According to data published by the International Federation of Robotics (IFR), China’s service robot market reached $2.2 billion in 2019, accounting for 25% of the global market. The Chinese Institute of Electronics estimates this share will reach 30% in the future.

In the “World Robotics 2020 Industrial Robots” report published by IFR, the global service robot market will reach $27.7 billion by 2023, with a compound annual growth rate of 26%. Competition is expected to further intensify in China’s market, which is forecast to grow to $8 billion by 2023.

36Kr, a Chinese tech news portal founded in Beijing in 2010, has more than 150 million readers worldwide. Nikkei announced a partnership with 36Kr on May 22, 2019.

For the Japanese version of this story, click here.

For the Chinese version, click here.

Read more at asia.nikkei.com

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