Robotics & Automation News

Market trends and business perspectives

E-commerce in the USA: Fast-growing demand for warehouse robots

The phrase “e-commerce in the USA” might immediately bring to mind the giant of the sector, Amazon, which is said to have received fully 40 percent of all online shopping orders over the Christmas period in the country.

It’s difficult to imagine how many orders and how much money that really is, but it’s not difficult to imagine Amazon being the winner – the company has been the biggest e-commerce platform in the US for many years.

Top 10 e-commerce companies in the US

According to eMarketer, Amazon has almost 50 percent of the US retail e-commerce market, as it showed in its list, which we reproduce below. 

The total value of the US online retail market is estimated to be worth $525 billion a year, and the 10 companies below accounted for approximately 70 percent of that amount in 2018.

  1. Amazon ~ 49.1 percent
  2. eBay ~ 6.6 percent
  3. Apple ~ 3.9 percent
  4. Walmart ~ 3.7 percent
  5. Home Depot ~ 1.5 percent
  6. Best Buy ~ 1.3 percent
  7. Quarte Retail Group ~ 1.2 percent
  8. Macy’s ~ 1.2 percent
  9. Costco ~ 1.2 percent
  10. Wayfair ~ 1.1 percent

And while many observers might remember that Amazon started as an online bookseller which persevered through the difficult times, one particular decision it took in 2012 may be said to be responsible for its current, literally astronomical, success – its $775 million acquisition of Kiva Systems, a maker of warehouse robots, now absorbed into Amazon Robotics.

Amazon is currently estimated to be operating more than 100,000 of the Kiva-type robots in its warehouses, and none of them were ever for sale to other companies, which gave the e-commerce giant a massive head start.

Eventually, three or four years after Amazon’s Kiva purchase, innovative new startup companies started bringing warehouse robots onto the market. Dozens of companies now offer warehouse robots.

Geek+ family copy

Robotics and Automation News produced a list of 30 warehouse automation technologies you may like to read.

Robotics as a service

One of the fastest-growing companies in the sector is Geek Plus Robotics, which offers a wide range of warehouse robots as well as supply chain automation solutions, built on artificial intelligence, including a new driverless forklift.

The startup was established in 2014 and has raised funding of approximately $150 million. Its current employee count is around 700, having started with fewer than 10. It has already provided more than 7,000 robotic systems to over 100 customers for warehouses in Asia and Europe, with the US now on the horizon.

The strong interest in its offering has taken Geek Plus by surprise.

In an interview with Robotics and Automation News, Lit Fung, general manager of Geek Plus, says: “The Asia-Pacific market started as our first priority. That’s why we established distributors and service centers in Asia early on.

“But luckily, we’ve got a lot of interest from around the world, so we have changed our marketing strategy. That’s why we have started expanding our market to Europe, and also America.”

Fung reveals that Geek Plus didn’t even have a marketing department in the early days. “We didn’t do much marketing previously and all the sales came from email enquiries coming to us. We didn’t approach customers.

“Now, we get at least one enquiry per day. We evaluate them to see what each customer requires.

“It might be a very big customer which enables us to enter new markets, such as retail, automotive, logistics and so on.

“So we think about the strategy relating to each customer.”

The e-commerce sector is proving to be a particularly dynamic market for Geek Plus, with the company having already installed its robots into the warehouses of companies such as Alibaba, a business-to-business online wholesale giant, and popular online retail outlet

Its success in Europe has included partnerships with some of the leading retailers on the Continent, in a variety of sectors, such as food and clothing. Now, the company feels it is ready to offer its products and services to US clients.

One important reason for the success of Geek Plus is its flexible business model. As well as being able to buy the company’s robots outright, customers can also choose to hire them, under the so-called “robotics as a service” arrangement.

Geek Plus was an early mover in this initiative because it recognized early on that hiring robots provides customers with an affordable way to roboticize their warehouse operation. “You only pay for what you use – no big upfront cost and less risk,” he says.

Whatever the reason, Geek Plus is finding enthusiastic customers for its robots in the e-commerce sector, especially as an increasing number of retailers choose to manage their own warehouses and supply chains.

geek plus automated forklift
Volkswagen executives visit a FAW facility in China to see the Geek Plus Robotics driverless forklift in action

Robots for everyone

Whether they opt for robotics as a service or buy the robots outright, the opportunity now exists for even relatively small businesses to roboticize their operation without necessarily installing hugely expensive fixed infrastructure such as conveyors and automated storage and retrieval systems.

Autonomous robots enable warehouse managers to keep the cost of setting up automation low. At the same time, if changes to the facility are necessary, there would be no need to uproot and move a large conveyor system or automated storage and retrieval system.

Having said that, a hybrid system is emerging where conveyors, automated storage and retrieval systems, with robotic shuttles, are being integrated with automated guided vehicles as well as autonomous mobile robots.

But arguably the simplest, quickest and least expensive way to set up is probably using autonomous mobile robots.

And for warehouses which currently load and unload trucks, and stack shelves, using forklift trucks, the day when they will be able to choose being a human-driven one and a driverless forklift is coming soon.

Geek Plus has already partnered with one of the largest automakers in China, FAW, to test a range of warehouse automation solutions, including its autonomous forklift.

FAW, which has a joint venture agreement with global auto giant Volkswagen-Audi, is looking into transforming its supply chain using the latest and most advanced robotics and automation technologies.

So, as well as food and clothes e-commerce, the automotive supply chain sector is also interested in these new warehouse robots.