China’s Retail Giant Meituan Launches First AI Smart Store, Realizing a New Retail Experience

China’s retail services platform Meituan officially released its first AI smart store MAI Shop on Wednesday in Beijing, bringing a new unmanned delivery retail experiences to residents.

The shop integrates an unmanned warehouse and unmanned distribution with AI technology and robots, and cooperates with takeout delivery personnel to supplement distribution capacity.

After customers place an order, the MAI shop system will process and complete the order through automatic picking, automated guided vehicle car distribution, packaging and unmanned vehicle distribution. And customers can obtain their order as they wait for the delivery of the unmanned delivery vehicle at the corresponding site and input the verification code received by their phones.

At present, MAI shop has an average 17 minute delivery time and 95% of orders had been delivered unmanned in the trial operation during the National day holiday, according to Meituan.

“It will have a positive impact on Meituan’s own business, such as improving the efficiency of food delivery and reducing labor costs in a closed park,” said Huang Zhuxi, an analyst studying unmanned vehicles at 36Kr Venture Capital Research Institute. “This new model pilot is ultimately to increase its technical barriers in the industry.”

Chen Na, head of Meituan unmanned distribution open platform, said that MAI shop is Meituan’s attempt in the mobile smart store. “Through the combination of AI technology and robotics, the online and offline unification of people, goods and stores in the new retail scene can be realized.”

Chen added that MAI shop provides assistance to both consumers and businesses.

MAI shop can provide consumers with the whole scene retail experience of going to the store, home and mobile shopping. Whether consumers pick up their goods at the store or place an order in the office, they can have a new retail experience.

For merchants, MAI shop can help businesses not only “improve efficiency and user experience through robots, but also help merchants achieve operations through big data and AI capabilities. At the same time, the ‘mobility’ brought by site plus unmanned distribution mode also reduces stores’ dependence on location.”

In addition to the MAI shop in Shougang Park, Meituan will also utilize its unmanned delivery vehicles during the 2022 Beijing Winter Olympics.

In October 2016, Meituan established a team and began to develop unmanned distribution in specific scenarios. In December 2017, the unmanned distribution department was established, led by Xia Huaxia, the chief scientist of Meituan, as the general manager of the department.

So far, Meituan’s unmanned delivery vehicles have been put into trial operation in Beijing and Xiong’an new area in Hebei Province.

The rapid development of China’s e-commerce sector has given birth to the development of logistics and distribution. The express delivery business volume is estimated to reach 74 billion pieces in 2020. And the increasing business volume has brought great distribution pressure to last mile delivery.

Specifically, the labor expenditure of express delivery and food delivery has become a huge cost for platforms. Therefore, relying solely on manual cargo distribution can no longer completely solve the problems faced by current last mile delivery. Many large platforms and start-ups have begun to explore how to use unmanned vehicles to improve the efficiency of last mile delivery.

The COVID-19 outbreak has caused many to look closer at unmanned delivery. Unmanned disinfection vehicles, unmanned distribution vehicles, unmanned patrol vehicles, and unmanned sales vehicles have solved various problems faced by the pandemic, especially in hard-hit places in China.

China’s tech giants such as Alibaba, JD, Meituan and other internet companies have also entered the field of unmanned distribution.

In February, the intelligent distribution robot of JD Logistics completed its first delivery in Wuhan, successfully transporting medical and living materials from Wuhan Renhe station to Wuhan Ninth Hospital.

At present, the 5G unmanned vehicle of Suning logistics has been put into use in Suzhou, providing contactless distribution of home services for Suning’s small stores.

Huang said that unmanned delivery is achievable in a relatively simple scenario in a closed park, but due to the limitations of sensors and networks, it is difficult to be put into use in overly complex streets.

However, although unmanned vehicles were widely put into use during the pandemic, there is still a long way before they see large-scale commercial use.

According to a 2020 report by 36kr Venture Capital Research Institute, the various categories of delivery items and the emergence of different types of local life service delivery such as vegetables and fruits, cakes, flowers, and medicine increases the difficulty of delivery.

What’s more, during the distribution process, environments can be complex, such as rainy days and limited distribution capacity at night, and goods can easily be damaged or lost.

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Although China’s large population density and complex traffic scenes contribute to the accumulation of rich road test data, the accumulation of data, algorithms and talent is still far from sufficient, state-owned media People’s Daily reported.

“Unmanned delivery will be the long-term direction of technological development and will improve productivity,” Huang said. “Short-term investment is definitely large. But the question of cost and revenue balance in 10 years remains unanswered.”