Small unmanned robots flying around delivering your e-commerce orders may still sound like stuff from a futuristic world from the movies, but Chinese authorities have picked up the gauntlet to try and make this dream real!

Last week, China’s CAAC Northwest Regional Administration issued a business license for civil unmanned aerial vehicles to Xi’an-based unit Tianhong Technologies, a unit of the Chinese e-commerce giant JD.com which would use it for delivery of its online orders especially to remote areas. Although the concept of using drones for last-mile delivery is not new, most demonstrations were just prototypes without any approval from government authorities.

There have always been concerns about the reliability of the technology to carry out drone deliveries. Government authorities and regulatory bodies have also voiced concern about the possibilities of hacking into such drones for anti-social purposes. There is also the larger problem of air traffic management at such low altitudes and some worry about the nuisance that drones can create with their noise! All these concerns have kept drones only in the realm of recreational activities such as photography and filming or for use in rural, remote environments.

China has over the years become the dominant player with DJI capturing the majority share of the world drone market. Even other Chinese companies like Yuneec and Ehang have sizable market share. This has made China a leading player in the global drone hardware market. It was about time that the country pushed this advantage further to drive more services using drones. The decision to allow JD.com to fly drones for delivery seems to be a step in that direction.

In the past, companies like Zipline have shown successful use of drones for delivery of blood packets for emergency services in Rwanda. Similar experimental demonstrations have been made for emergency services like fire rescue operations. There have also been trials of food delivery of pizzas by Domino’s in New Zealand while DHL in partnership with Workhorse has performed trials of last-mile delivery of its packages in remote areas. Most companies in this domain like Matternet, Flirtey Aerones, Workhorse, Zipline are US based. But, the FAA still only allows line-of-sight operation of drones in urban areas. This is the case with most of the developed world. This of course makes it difficult to take any of the drone delivery trials to the commercial phase.

Chinese authorities have taken a bold step but there still much to be done to make drone delivery mechanisms foolproof and viable for sustained, large scale operations. However, advancements in Artificial Intelligence including vision systems and autonomous navigation systems have made the current generation of drones reliable enough for short distance autonomous flights.

Again there is the challenge of developing the infrastructure required to manage large scale operations of autonomous drones similar to the passenger aviation industry. There is an enormous scope for development of air traffic control systems, autonomous flight paths systems, aviation information providers, fixed flight and landing stations if needed similar to airports and most importantly cyber security solutions to make sure the drones are not hacked into by unauthorized elements. This is another opportunity for Chinese startups to develop distinctive solutions addressing these challenges. There is enormous market potential if the entire system is successfully executed and operational. Many other countries would then stand in line to implement such systems.

By taking the first step, Chinese authorities seem to have given an initial advantage to their start-ups as well as established drone companies. It would be interesting to see how the USA and other countries with significant UAV talent advance their policies.

The future seems bright for drone based logistics and software solutions providers developing supporting ecosystems.

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