GreyOrange, robot-maker, plans Chinese expansion

Chinese market too big for just one company.

PUBLISHED : Monday, 16 May, 2016, 11:10am
UPDATED : Tuesday, 17 May, 2016, 8:19am

Indian company GreyOrange, which makes robots that pick and move packages in warehouses, plans to expand to mainland China in the third quarter and become a major operator in the country’s automation market.

“We are aiming at a 50 per cent market share in China,” said Nalin Advani, the chief executive for Asia-Pacific and Japan at GreyOrange.

As rising wages prompt many labour-intensive businesses to move their operations to neighbouring countries, China has found itself a ripe market for robotics companies with automated systems that can replace human workers, analysts said.

GreyOrange provides two robot lines, “Butlers” and “Sorters”.

Butlers fetch goods from shelves and bring them to human workers for processing. Sorters load, scan and bag packets.

Advani said GreyOrange intends to partner with a Chinese logistics-services provider to help market and distribute its products in the country — the world’s largest e-commerce market.

“In two to three years, the Chinese market will be as big as the Indian market for us,” he said.

Data from the International Federation of Robotics showed that mainland China extended its lead as the world’s top market for industrial robots, with unit sales of 66,000 last year, up 16 per cent from 2014.

Watch: Robotic system for put away & picking

Sales of industrial robots in Europe reached nearly 50,000 units last year. Combined sales in the United States, Canada and Mexico reached 34,000 units.

GreyOrange claims to have over more than 95 per cent of the logistic automation market in India with customers such as Amazon India and Flipkart, the largest home-grown e-commerce company in the country.

Driven by labour shortage problems, rising wages, and the need to avoid human errors, Chinese e-commerce companies will transform their logistics operations to automation eventually, said Dr. Zhang Jingbing, research director and lead analyst of research firm IDC’s Worldwide Robotics Programme.

Most of the large e-commerce platforms in China have started to incorporate automation into their logistic networks but large-scale adoption has yet to take place.

Alibaba Group, the world’s biggest e-commerce services company, adopted a similar robot system in its warehouse in the northern costal city of Tianjin, using solutions from domestic start-up Geek+. Alibaba owns the South China Morning Post., the mainland’s second-largest online retail services provider after Alibaba, said last year it has an autonomous warehouse in Shanghai that relies on elevators and conveyer belts.

Advani said the company’s system is more intelligent than those from its Chinese competitors who only build “remote control cars”.

If blue jeans are often bought with a red shirt, the system will automatically group the two products together, Advani said.

GreyOrange competes with e-commerce giant Amazon, which had an early start in logistic automation by aquiring Kiva Systems, an US robotic start-up with more than US$775 million in 2012. Now renamed as Amazon Robotics, it operates more than 30,000 robots in Amazon’s warehouses.

Founded in 2011, GreyOrange completed a US$30 million B round funding last August led by Tiger Global Management and Blume Ventures. The money will be used for expansion to Japan and China, it said.

GreyOrange, which has its Asia-Pacific headquarters in Singapore and a satellite office in Hong Kong, set up operations in Japan in January by investing in local logistics provider GROUND.

GreyOrange may have advanced technology but the Chinese market is big enough for both high-end and cheaper robots, according to Zhang.

“It is just too big for just one company to digest,” he added.