In a restaurant in Spain, nimble robots weave through the premises, delivering dishes and assisting diners with getting their menu orders taken.
Elsewhere, in a Japanese nursing home, robots carry a variety of foods and daily necessities, distributing them to designated areas on behalf of the elderly.
At the London Luton Airport, an autonomous robot is responsible for cleaning the airport floor, wiping away while releasing disinfectant spray from one of its side compartments.
These service robots may work in a wide range of settings such as restaurants, banks, enterprises, large stores, and specialty shops worldwide, but they are largely manufactured in China.
By prioritizing a mix of service capabilities and cost-effectiveness, China-manufactured robots are rapidly gaining market share in Asia, North America, Europe, and the Middle East. According to data from the Korean Association of Robot Industry, over 70% of service robots deployed in South Korea, as of 2022, were produced by Chinese manufacturers. A report by the International Federation of Robotics also stated that out of the 218 existing service robot suppliers in the US, 106 are Chinese companies.
“In the past, Chinese robot exports delivered 70% of advanced overseas product performance at 50% of the price. Today, they compete at 150% performance and 80% of the price against international robot companies. Chinese products are becoming more competitive and cost-effective,” said Li Tong, founder and CEO of Keenon Robotics.
Companies like Keenon Robotics, Pudu Robotics, Gausium, and Reeman have already secured a significant share in the international market. But how do Chinese service robot companies go global? What advantages do they have, and what challenges do they face?
The global wave of China’s service robots
Service robots used in various business sectors are typically developed based on industry needs. Businesses such as banks, restaurants, stores, and specialty shops generally require service robots to fulfill different use cases. They could be employed to guide, educate, patrol, and more. Service robots can also help improve work efficiency, replace manual labor, and alleviate staffing challenges for small and medium enterprises.
During the 2023 World Robot Conference, Li said that Keenon Robotics holds over 60% of the domestic market share in the service robot sector for the catering industry. However, the volume of its current overseas business has surpassed its domestic business.
Currently, Keenon Robotics has major overseas branches in Los Angeles, Germany, Tokyo, Seoul, Dubai, and Hong Kong, spanning over 600 cities and regions globally. For example, in the Sheraton Hotel in Tokyo Bay, Japan, Keenon Robotics’ W3, a hotel service robot, is used to welcome guests, guide them to locations, provide information, and handle unmanned deliveries.
In overseas markets, Keenon Robotics focuses on R&D and selling products to distributors. Distributors then lease or sell its products to end customers and provide related services.
Pudu Robotics operates two product lines: delivery robots and cleaning robots. As of August 2023, its global shipments is close to 70,000 units, reaching over 600 cities across more than 60 countries and regions in Asia, North America, Europe, and more.
In Japan, Pudu Robotics’s clients include Zensho and Skylark, the country’s two largest restaurant enterprises. In Hong Kong, Pudu Robotics holds a 95% market share in the meal delivery robot market, and in Europe, its robots have been deployed in Spain’s Magic Natura Resort and the Warsaw Marriott Hotel in Poland.
From an operational perspective, Pudu Robotics currently adopts a “general agent-distribution” model in the South Korean market, where VD Corporation serves as the general agent, helping Pudu Robotics fulfill mass shipments while also establishing a comprehensive after-sales service system locally.
Gaussian Robotics, a leading company in the field of commercial cleaning robots, has applied its Ecobot Scrubber series in various high-end public service locations globally, including Singapore’s Changi Airport, Sydney Airport in Australia, Hamad International Airport in Qatar, Hong Kong International Trade Plaza, and Grand Hyatt properties in Australia.
According to Guotai Junan Securities, the total global shipment volume of commercial cleaning robots in 2022 was approximately 20,000–25,000 units, with Gaussian accounting for 60–70% of the market share. The shipment ratio between domestic and overseas markets is equivalent.
China-manufactured commercial service robots have also entered the Middle Eastern market. In 2021, Yunji Technology’s delivery robot was deployed at the Crown Holiday Hotel in Saudi Arabia. During the 2020 Dubai Expo, Terminus Group’s service robots served various roles, including ushering, meal deliveries, material distribution, and group dance performances, accumulating over 50,000 working hours.
During the 2023 World Robot Conference, the person in charge of Unitree, a quadruped robot manufacturer, said that the company’s overseas business accounts for 50% of the total revenue. The head of Siasun Robotics also said that they have been laying out their overseas business for years, and in the past two years, the company has seen significant growth in orders from overseas.
Thousands of Reeman disinfection robots supported the fight against the pandemic overseas, exported to over 30 countries including the US, the UK, France, Japan, and South Korea. As of 2022, Reeman’s total revenue has exceeded RMB 600 million, with overseas sales accounting for over 60%. Reeman’s robots and robot chassis (which is sometimes referred to as the robot’s frame) have been utilized in 55 countries globally. The company has established subsidiaries and offices in countries such as Japan and the Philippines, signing exclusive agency agreements in more than ten countries.
A report by EO Intelligence highlighted that manufacturers of commercial service robots, with shipments surpassing 60,000 units, are at the forefront of exploring overseas markets. These companies have established comprehensive systems for research and development, manufacturing, sales, and service, securing a significant share in the international market.
Opportunities in the global market
Globally, developed regions, grappling with limited workforce numbers and aging populations, are experiencing a growing demand for robots. Countries like Canada and Australia, for example, are facing a significant shortage of labor in the hospitality and restaurant sectors, exemplifying this trend.
According to Statistics Canada, in March 2022, there were 158,100 unfilled positions in Canada’s hotel and restaurant services industry, with a vacancy rate of 12.8%, ranking first among the 20 industries monitored. The German Economic Institute has predicted that Germany will face a cumulative shortage of about 5 million working-age people by 2030, representing a significant labor force gap in the coming years.
This labor shortage provides “employment” opportunities for commercial service robots. Using leasing as an example, the monthly rent for a commercial service robot is merely half to one-third of the monthly labor salary in developed countries. Consequently, service robots are rapidly proliferating across industries and enterprises of various sizes, with Europe, America, Japan, and South Korea at the forefront. These highly developed regions exhibit a strong willingness to invest in service robots, presenting opportunities for Chinese commercial service robots to expand globally.
However, the international success of China-manufactured robots should be attributed not only to this shift in demand, but also the competitive advantages they possess.
For one, Chinese service robot companies typically operate a better setup and application environment than their overseas counterparts. According to Wang Huan, director of the Policy Research and International Cooperation Center at the China Institute of Electronics, China has the world’s largest and most comprehensive robot industry ecosystem. From components to machines, integrated applications, and beyond, China’s robot industry has essentially formed a complete and resilient supply chain, reducing costs and improving operational efficiency for local manufacturers.
In the realm of software technology, China’s diverse application scenarios offer immense growth potential for robot enterprises, a key advantage propelling the rapid evolution of the country’s intelligent robot industry. Fu Sheng, chairman of Orion Star, highlighted the role of the internet in nurturing skilled engineers and innovative product managers in China. Combined with the full-scale testing of the country’s artificial intelligence technology across various applications, these factors further contribute to the development of China’s progress in service robots, positioning it as a global leader.
In 2022, the “14th Five-Year Plan for the Development of the Robot Industry” jointly released by the Ministry of Industry and Information Technology and 15 other departments proposed that, by 2025, China is poised to emerge as a global center for innovative robot technology, high-end manufacturing consolidation, and integrated applications. According to Wang Hong, deputy director of the Ministry of Industry and Information Technology Equipment Industry Development Center, China produced 6.458 million units of service robots in 2022. In the first half of this year, 3.53 million service robots were produced, representing a year-on-year increase of 9.6%.
On the other hand, domestic market competition may also be a factor that has led robot enterprises to venture abroad for new opportunities. According to the IDC, China’s service robot industry began maturing in 2022 as its growth slowed. This trend affected the finances of the companies, leading to reports of layoffs. Going global has seemingly become an essential means for service robot manufacturers to seek a new growth curve.
Challenges in the journey of globalization
Although possessing numerous advantages, domestic manufacturers of commercial service robots encounter several challenges when expanding globally.
Yan Weixin, an associate researcher from Shanghai Jiao Tong University, said that legal regulations, differences in application environments, and understanding the fundamental market needs continue to be key challenges for Chinese robot enterprises.
The initial challenge lies in varying regional standards, requiring intricate product certification and admission permits for global market entry.
Keenon Robotics has substantial experience in this regard. According to Li, each country follows a different set of product certification standards, and some countries do not even have ready-made standards for service robots. Circumventing this challenge requires continuous experimentation, exploration, and refinement of products. Currently, Keenon Robotics has participated in and completed robot export certifications in 64 countries, and it has received the UL certification in the US.
Adapting service robots to fit the needs of local markets can also be a critical issue. Due to cultural and geographical differences, demand for service robots can vary across different countries and regions. For example, restaurants in Japan and Hong Kong generally have narrow spaces, requiring robots to have a more compact appearance and sophisticated obstacle avoidance capabilities.
Influenced by its “kawaii” (cute) culture, companies in Japan may prefer to purchase cute-looking robot products. To cater to this preference, Pudu Robotics incorporated a set of cat ears onto the head of its meal delivery robot, BellaBot. Additionally, the company crafted cherry blossom and kimono skins tailored specifically for the Japanese market, enhancing the experience for consumers engaging with robot services.
In upscale hotels, there is often a desire for robots to complement the atmosphere of the property. Keenon Robotics offers specialized services to customize the appearance of robots, aligning with the preferences of hotel clientele.
With the widespread use of technologies like AI, big data, and 5G in the service robot sector, concerns about data security have gained public attention. Li Junlan, research manager at IDC China’s emerging technology research department, said that Chinese service robot manufacturers should pay attention to overseas compliance and risk control in terms of data security, cross-border transmission, content security, and supply chain risks.
While Chinese service robot manufacturers have excelled in global markets due to strong demand, industrial advantages, and technological innovation, they confront challenges related to varying standards, localization, and data security, necessitating adept navigation for sustained global success.
This article was adapted based on a feature originally written by Li Jiaxuan and published on Ebrun (WeChat ID: iebrun). 36Kr Global is authorized to translate, adapt, and publish its contents.