[Depth] The rise of Chinese warehousing robot companies

In a warehouse outside the Fifth Ring of Beijing, dozens of criss-crossing black straight lines cut the warehouse floor into the shape of a Go chess board. 20 silver-gray storage robots shuttle busily along the board, stacked beside them. 50 shelves more than two meters high. A robot got under one of the shelves, slowly lifted it a few centimeters, and moved the shelves to the picking workers along the fixed line.

Beijing Geek+ Technology Co., Ltd. (hereinafter referred to as Geek+) is the owner of this warehouse and the manufacturer of these warehouse robots. This 400-square-meter warehouse has abandoned the traditional picking method of "people looking for goods" and replaced it with a new model of "shelf to people".

Geek+ uses this warehouse to store robot parts and also serves as a laboratory for debugging robots. The company’s senior technical director Guan Xiaochuan told Jiemian News that each robot will run in this warehouse for more than 8 hours before leaving the factory to ensure its stability. Last year, Geek+ sold 400 similar robots to Vipshop, Suning and other customers. Some warehouses on these e-commerce platforms have been partially “unmanned”.

Geek+ warehousing robot applied to Suning warehouse

On July 13, the startup company with about 150 employees announced that it had received another US$60 million (about 408 million yuan) in Series B financing. The private equity firm Warburg Pincus Investment led the investment, and the original investor Fang Volcanic Stone Investment followed the investment.

In the past 14 months, Geek+ has completed three rounds of financing with a total of more than 550 million yuan. In May 2016, the company received 50 million yuan A round of financing from Volcanic Rock Investment and Gaorong Capital. Four months ago, Xiangfeng Investment led the investment in Geek's 100 million yuan A+ round of financing.

Zheng Yong, the founder of Geek+, has worked in robotics companies such as ABB for many years. Inspired by Kiva System, in 2015, he founded this robot company that is highly sought after by capital. Kiva is considered the originator of the warehouse robot industry. In 2012, Amazon spent 775 million US dollars (about 4.86 billion yuan) to acquire it.

In China, there are others who have been involved in the field of storage robots earlier than Zheng Yong. In late 2013, Yang Wei, who worked at Zhenhua Heavy Industry, also noticed Kiva. After studying the principles of storage robots, he and two other partners realized that the booming domestic e-commerce industry will provide a broad market for such robots.

The three jointly registered and established Shanghai Kuaicang Intelligent Technology Co., Ltd. (hereinafter referred to as Kuaicang) in 2014, and completed the production of a robot prototype. Since then, the founding team has built the company's first "unmanned" warehouse and obtained an angel round of investment of 10 million yuan.

By the end of last year, Kuaicang had sold nearly 700 storage robots, which were used in more than a dozen warehouses owned by e-commerce companies such as Cainiao and Vipshop. In 2015 and 2017, the robotics company also received a total of about 230 million yuan in A and B rounds of financing. Investors include Best Logistics, Cainiao and SoftBank China. Currently, Kuaicang, with nearly 140 employees, sits on a valuation of 1 billion yuan.

The two Chinese warehousing robotics companies are not shying away from their imitation of Kiva. As far as the appearance and operating principle of robot products are concerned, the similarity between the two is beyond doubt. Like Kiva, both Geek+ and Kuaicang robots use a QR code navigation method. The two-dimensional code pasted on the ground is used to guide the robot how to move on the "chessboard". This solution is considered to have the advantages of low cost and high precision.

Sun Di, the marketing director of Kuaicang, told the interface news reporter that in traditional warehouses, due to the need to walk around the shelf area for picking, a sorter can only handle about 150 orders a day. After the warehousing robot intervenes, the sorter's order processing capacity can be increased to 350 orders per day.

Both Kuaicang and Geek+ position themselves as logistics solution providers, rather than mere robot manufacturers. This concept is quite similar to Apple. It is not only a manufacturer of mobile phone hardware, but also a provider of ios mobile phone systems.

After more than two years of market cultivation, this new thing is gradually accepted in China. Zheng Yong, the founder and CEO of Geek+, said, "In terms of the number of customers, we can already clearly feel the changes in the market." Therefore, he formulated a plan for the company to sell 2,000 robots this year, and Kuaicang also set the goal. 1,500 units, this set of figures has more than doubled the number of sales of the two companies the previous year.

Fortunately, in the Chinese market, these manufacturers have not yet encountered a strong impact from foreign rivals. Amazon, which has deployed tens of thousands of Kiva robots around the world, has not yet launched a "machine substitution" attempt even in its self-operated warehouses in China. In the field of traditional industrial robots, Chinese local manufacturers have been suppressed by Japanese and German companies for a long time, occupying less than 1/3 of the domestic market.

The difference in application scenarios at home and abroad is considered to be an important reason why foreign companies such as Amazon have not set foot in the Chinese market.

After Kiva was acquired, robots were only used in Amazon's super large warehouses. However, China's warehouse resources are more scattered and the area of ​​a single unit is smaller, and the application scenarios faced by warehouse robots are therefore much more complicated.

Different warehouse owners will propose differentiated warehousing logistics requirements, such as high timeliness, warehousing robots and back-end systems need to have faster response speeds. This also means that it is difficult for robot providers to adapt to all customers with a system. Zheng Yong also said that according to the different needs of customers, Geek+ will adjust the core algorithm of the robot system in a targeted manner.

After Kuaicang and Geek+ successively completed the B round of financing, the competition of domestic warehousing robots has entered a new stage. Their first task will be to improve their products and consolidate their market positioning. Some people in the industry compare domestic warehousing robot products with brands such as Kiva. It is undeniable that there are still many gaps between the two sides in hardware details.

Kuaicang has now upgraded the company's warehousing robots as a whole to the third generation. This version has improved the performance of the robot in many aspects such as the running speed and the time to lift the shelves. Guan Xiaochuan, senior technical director of Geek+, also told Jiemian News that the company expects to launch the fifth-generation storage robot in the third quarter of this year and mass-produce it on a small scale by the end of the year.

At present, both Geek+ and Kuaicang are considering upgrading the existing QR code navigation mode and adopting more advanced visual navigation (SLAM).

In addition to technological upgrading, how to expand the market is also a problem faced by the two machine start-up companies.

E-commerce is currently the main sales target of warehousing robot companies. With Amazon's successful experience, customers in this field are more likely to accept "unmanned". E-commerce companies like JD.com even chose to develop their own storage robots.

Warehouse robot products such as Kuaicang and Geek+ provide a solution for warehouse automation, while traditional robot manufacturers are also trying to promote another "unmanned" path based on their own advantages. At a recent event, ABB demonstrated a logistics warehousing solution completed by industrial robots. Two fixed "mechanical arms" cooperate with each other to realize the warehouse's cargo storage and sorting functions.

In the next 3-4 years, the rapid development of the warehouse robot industry has become inevitable. Market consulting firm Tractica predicts that by 2021, global shipments of warehousing and logistics robots will surge from 40,000 units in 2016 to 620,000 units, and the market size may also surge from US$1.9 billion to US$22.4 billion.

The Chinese market is naturally an important part of it. In addition to Kuaicang and Geek+, nearly 20 domestic companies have entered this market. Sun Di, marketing director of Kuaicang, said that everyone is aware of the business opportunities, which means that there will be very fierce competition in warehousing robots used in the field of e-commerce. After Cainiao led the B round of financing, Kuaicang has taken the lead in e-commerce, which is a great guarantee for its future sales performance. Of course, Kuaicang is also looking for more logistics and warehousing companies to become its customers.

Geek+ has another plan. The company plans to promote a "pay-per-bill" business model in the second half of the year. It will charge based on the amount of warehouse receipts processed by the rented robots, so as to save customers from purchasing robot equipment. Zheng Yong believes that "pay per bill" may be a more reasonable operating model, and it can also facilitate Geek+ to deploy robots in various warehouses more flexibly, thereby balancing the needs of different customers.

The two companies also coincidentally set their sights on overseas markets. In the first quarter of this year, Geek+'s robot warehouse in Japan has been put into operation, and is in contact with projects in Hong Kong, Singapore and other places. Kuaicang plans to leverage Cainiao's resources to launch storage robots in the Southeast Asian market.

In an interview with Jiemian News reporters in the middle of the year, both Geek+ and Kuaicang said that this year's sales target is likely to be achieved.