Noon, the e-commerce platform in the Middle East, is now partnering with Neolix, a Chinese tech company, to bring driverless vehicles to the UAE and Saudi Arabia—specifically designed for last mile deliveries in the region where temperatures soar high during summers.
Noon, owned by Mohamed Alabbar, who is also the founder and chairman of Emaar Properties, announced that it will be conducting tests for the driverless delivery vehicles in the coming weeks.
"Over the next few weeks, Noon.com will trial autonomous vehicles to complete its last-mile delivery in key areas of Abu Dhabi and Dubai. The driverless vans are being especially customised to suit the region’s weather conditions, and are being seamlessly integrated with Noon’s logistics platform."Noon
Coming to whether UAE roads are fit for driverless vehicles, KPMG’s 2019 Autonomous Vehicles Readiness Index ranked UAE in the world’s top 10 countries that are best prepared for driverless vehicles; ahead of Canada, Australia, Japan, France as well as China.
Moreover, Dubai Autonomous Transportation Strategy’s vision is to make a quarter of all transportation in the emirate autonomous by 2030. It already has the autonomous metro system. It would indeed be quite exciting to see driverless vehicles in the emirate.
Driverless cars for last mile delivery are a phenomenon that is catching up around the world. Neolix is certainly not the only company introducing the concept. There is Nuro from Silicon Valley and Kar-go from The Academy of Robotics in the UK.
Neolix started the mass production of its driverless delivery vehicles in May earlier this year. It is looking to deliver 1,000 of such vehicles by the end of this year to solve the pain points of not just Noon, but also other e-commerce platforms in China, such as JD.com
Neolix does look quite different from others in the west though. Pictures from Bloomberg suggest it has refrigeration capabilities. This could revolutionise the e-commerce market by allowing noon to potentially be able to deliver fresh produce.
These are exciting times. Amazon recently started selling a few grocery items from Spinneys that do not require refrigeration. Spinneys said in a statement to SME10X that it is looking into expanding its “online product offering to include the fresh categories.”
So why is Noon and other driverless vehicle startups looking at the ecommerce space when arguably the world’s biggest e-commerce company, Amazon is leading with drones?
The simple answer is cost. But also, driverless cars are looking for a way to enter the world’s real roads through a suitable industry, as they require a lot more testing before they can be deemed safe for humans.
Last mile delivery is the most expensive part of a delivery chain— a pain point of many ecommerce platforms around the world. From the final depot to the customer’s house, the price goes up exponentially. Driverless cars can reduce this by 90% according to William Sachiti, founder of The Academy of Robotics in the UK, who unveiled the startup's self driving car, Kar-go just a couple of weeks ago.
Noon has announced the same, 90% percent in potential cost reduction with Neolix's autonomous vehicles. Considering it is competing with Amazon in the UAE—and recently announced free delivery on all orders in the country—such a reduction would be a sure strength for the company.
“Self-driving vehicles will start in the delivery and goods sector. Most of what you pay to have a parcel delivered now goes to that last mile of transport to your house. But with autonomous vehicles we can reduce the cost to just 1.2 pence a mile.”William Sachiti, founder of The Academy of Robotics, UK
The interesting aspect here, most of all, is that of the end customer. The obvious benefit is perhaps more services and discounts, considering ecommerce companies will be able to reallocate budgets with 90% cost savings. However, knowing that many people in the region haven't seen driverless vehicles in their lives, this could bring massive interest in shopping from Noon.
Moreover, e-commerce is the perfect testbed for further research into driverless vehicles that could one day carry humans around and revolutionise the ride-hailing industry that is currently seeing increasing competition between Uber, Didi Chuxing and Ola.