After years of development, China has realized the layout of the entire industrial chain of service robots and built a complete industrial ecosystem. This article tracks Chinese service robots' history and current market landscape and lay out the future key trends to watch in this field.
Driven by various factors such as normalized epidemic prevention and control, the aging population, technological progress and policy support, the value of service robots has been further explored, and the industry has quickly passed the stage of market education and entered a golden period of development.
According to the World Federation of Robotics (IFR) definition, a service robot is an actuated mechanism programmable in two or more axes, moving within its environment to perform practical tasks for humans or equipment, excluding industrial equipment automation applications.
The development of China's service robot industry so far can be roughly divided into three stages:
(1) Emerging period (1970~1985): In 1970, the first American Industrial Robotics Symposium was held in Chicago, USA. In 1977, the symposium was renamed the International Robotics Symposium, and service robotics was also included in the discussion. Since then, the research of robots has been rapidly and widely popularized, and the application of robots has set off a climax worldwide. Against this background, China began to develop robots in 1972.
(2) Exploration period (1986~2017): At the end of 1986, the No. 24 document of the Central Committee of the Communist Party of China listed intelligent robots as one of the two major themes in the automation field of China's "863 Plan". With the support of national policies, China's service robot research and production have done a lot of work and achieved specific results. In 1995, Tsinghua University developed a 7-degree-of-freedom mobile nursing robot, taking high-level paraplegics as nursing objects to take medicine, deliver water, and flip books for patients without supervision. In 2012, the Ministry of Science and Technology of China issued the "Twelfth Five-Year Special Plan for the Development of Intelligent Manufacturing Technology (Chinese: 智能制造科技发展 "十二五" 专项规划)" and "The Twelfth Five-Year Special Plan for the Development of Service Robot Technology (Chinese: 服务机器人科技发展 "十二五" 专项规划)" and proposed to focus on cultivating and developing emerging industries of service robots. This period is the exploration period of China's service robot industry.
(3) Market start-up period (2017-present): Most service robot companies in China are still in the early stage of industrialization, and only some robot companies have achieved mass production. China's service robot industry has been upsurged as innovative manufacturers have emerged continuously. However, some players have gradually withdrawn from the market or transformed due to capital or technology constraints, and the growth rate of the service robot market has slowed down. The business model of manufacturers who persist will gradually become clear. Household service products such as iRobot and Ecovacs have entered the lives of ordinary consumers. "Toy-like" service robots are rapidly popularizing among educated consumers, and the industry has entered the start-up period.
Segmentation & Market size:
Based on application scenarios, service robots can be divided into two categories: personal/household service robots and professional service robots. Personal/household service robots include sweeping, window cleaning, companion, and educational robots. Professional service robots can be further broken down into special and commercial service robots. Examples of professional service robots include tour, delivery, inspection, logistics, medical, and security robots. Examples of special service robots include fire robots, explosive ordnance disposal (EOD) robots and underwater robots.
Educational Robot: Policy support and the innovative teaching model of introducing artificial intelligence technology are the main factors for the rapid development of China's educational robot solution industry. China's educational robot market increased from CNY 600 million in 2017 to CNY 2.3 billion in 2021, with a compound annual growth rate of 39.9%. In the future, with the government's promotion of artificial intelligence education and the expansion of school synthetic intelligence laboratories and programming laboratories, the market foundation for educational robots will continue to expand. The market size is expected to reach CNY 3.3 billion in 2023.
Logistics Robot: China's logistics robot market increased from CYN 1.5 billion in 2017 to CNY 8.9 billion in 2021, with a compound annual growth rate of 56.2%. In the future, with the development of automation in logistics and storage facilities, the demand for logistics and mobile robots will continue to increase, and the market size is expected to reach CNY 18.8 billion in 2023.
Healthcare Robot: Affected by the long-term shortage of nursing workers and the rising aging trend in China, the demand for healthcare robots has increased. Regarding sales revenue, China's healthcare robot market increased from CNY 200 million in 2017 to CNY 1.4 billion in 2021, with a compound annual growth rate of 62.7%. In the future, driven by technological progress, the healthcare robot industry will be further commercialized, and the market size is expected to increase to CNY 2.7 billion in 2023.
Sweeping Robot: Under the influence of fast-paced life, emerging sweeping and ground-cleaning robots will meet consumers' needs for household cleaning. The market size of sweeping robots increased from CNY 4.4 billion in 2017 to CNY 12.1 billion in 2021, with a compound annual growth rate of 28.8%. Driven by several key technological breakthroughs, customer experience will be highly improved, leading to further market growth. The market size is expected to increase to CNY 18.1 billion in 2023.
Food Delivery Robot: In the past two years, triggered by the epidemic and the popularity of non-contact services, the demand for food delivery robots in various scenarios has grown. In 2021, the market size of China's food delivery robots reached CNY 600 million. The market size is expected to reach CNY 3.2 billion in 2026.
Market Main Drivers and Future Trends
It is believed that China is at the golden age of service robot expansion, and looking at the future, elements from the capital, societal and technological perspectives are expected to continue driving the growth.
From the perspective of investment and capital market, the number of investment events in the field of service robots in China reached a small peak in 2021, with 117 investment and financing events and a total funding amount of CNY 24.76 billion. And it continues to be the focus of capital in 2022, with a total of 84 events reaching a funding amount of CNY 14.55 billion in the service robot sector. Judging from the round distribution of financing projects, the B-round and later projects accounted for more than 30%, and the concentration effect of capital on top projects is more prominent.
On the societal level, the continued decline in the birth rate and the increasingly severe aging problem gradually disappear China's demographic advantage, and labor costs continue to rise. Under such a situation, the emergence of service robots can replace part of the labor force, save business expenses, and thus promote industry development. Currently, the catering and delivery industries have been able to use service robots to complete simple and highly repetitive tasks. On top of that, the "contactless economy" has been highlighted after the normalization of the epidemic. The demand for intelligent reception, unmanned cleaning and disinfection, unmanned distribution, and unmanned retail has increased, which has brought a new direction to the Chinese service robot market.
On the technological level, the advancement of high-tech and intelligent solutions has prompted the growth of the service robot industry. Service robot development is based on the artificial intelligence application layer. The artificial intelligence technology layer, such as machine learning, visual recognition, natural language processing and other perception and algorithm technologies, and the primary layer of artificial intelligence, big data, influence it. With the development and application of deep learning algorithms, the application capabilities of machine learning and visual interaction of service robots will continue to improve, becoming one of the critical drivers for industry headway. In the future, robots are expected to become the entrance and connector of scene data and become an important link to realize the digitalization of the whole scene and the collaborative integration of cloud, edge and terminal.
Enterprise Analysis & Insights
According to statistics, in the past three years, the number of service robot-related enterprises in China has increased by 296% to more than 100,000. In 2021, the market size of China's service robots reached CNY 46.7 billion, which is expected to rise to CNY 73.5 billion in 2023. All these numbers indicate a wave of industrial development of service robots is coming. Many enterprises are pouring in, and one of them is Segway Robotics.
Segway Robotics focuses on commercial service robots for delivery scenarios. In the indoor delivery field, Segway Robotics has a comprehensive product layout, serving customers from different areas; In the outdoor delivery field, Segway Robotics is mainly responsible for providing industrial solutions and cooperating with other companies to complete the outdoor delivery process jointly. Additionally, Segway Robotics has huge comparative advantages over other start-ups in terms of excellent hardware development capability and a strong supply chain.
According to Jason Dong, the general manager of Segway Robotics, as an international company, Segway Robotics' business has expanded to North America, Europe and the Asia-Pacific region, with a 60% share of the overseas market and 40% of the domestic market. In addition, Segway Robotics plans to develop the overseas market further, targeting regions with relatively expensive labor costs.
Jason Dong also pointed out that China has the most comprehensive supply chain in the world, providing domestic companies with a massive advantage in terms of product cost and delivery efficiency. More than that, China's wide range of application scenarios unlocks more possibilities for robotic companies. Currently, most domestic service robot companies' scale is small and can hardly generate huge profits. Therefore, Segway Robotics believes that going abroad should be an essential strategy for all ambitious robotic companies, as exporting products to countries with higher labor costs will generate higher profit margins and enable more funds for technological development to make robotic technology more mature and less costly. Overall, the demand for service robots will grow domestically and abroad, and companies should grasp the chance.
About the Interviewee:
Jason Dong is the general manager of Segway Robotics and has more than 10 years of industry experience. Before joining Segway Robotics, he worked for ECOVACS DEEBOT for several years.