Dada Group (NASDAQ: DADA)’s Dada Now is a leading local on-demand delivery platform in China, providing indispensable delivery infrastructure to local retail in the new era. Bing FU, General Manager of Dada Now, gave a speech on the topic “AI empowers on-demand delivery infrastructure” at the World Artificial Intelligence Conference (WAIC) held in Shanghai, elaborating how to improve efficiency and bring better fulfillment experience for customers, merchants and riders.
Dynamic match supply and demand
AI technology has gradually evolved to a mature stage. Meanwhile, online and offline channels are integrating with the development of on-demand retail; the demands and scenarios of on-demand retail have becoming increasingly abundant; and the order volume has shown a trend of rapid growth.
According to the “2022 On-demand Delivery Service White Paper” jointly released by LOG Research and Dada Now, from 2014 to 2021, the number of on-demand delivery orders grew explosively. The number of orders in 2021 was 30.85 billion, with a CAGR close to 60%.
Different from traditional logistics that often require multi-day, local on-demand orders are omni-channel, full-scenario, full-category and full-time, with a requirement to be delivered within one hour.
The increasing number and the features of delivery orders put forward higher requirements for delivery capacity. On the one hand, more riders are joining, and their working time and locations are constantly changing, posing a challenge for high-quality management and coordination. On the other hand, on-demand delivery has developed diverse types, including two-wheeled, four-wheeled and autonomous delivery. The question of how to ensure more efficient and stable fulfillment has become the key for the upgrade of the on-demand delivery industry.
Bing FU noted, “Supply and demand sides of on-demand delivery are more random than traditional logistics, and AI technology is essential to match the two sides dynamically. Meanwhile, we also care about the feelings of customers, merchants and riders, while improving efficiency.”
Tech in last mile delivery
Dada Now’s smart order dispatch system can realize real-time dynamic match of massive orders and riders. Data shows that the order distribution system plans routes 176 million times per day, with the average order response time being within 10 milliseconds, and the average delivery time being about 30 minutes.
For riders, the biggest “pain point” is to accurately locate the buildings where customers are. Based on the accumulated historical data from billions of riders, corresponding with the order address, Dada Now has adopted an AI analysis algorithm to effectively identify the building. Bing FU stated that the accuracy rate has been improved to 95.1%.
The AI algorithm also factors in the riders’ experience and safety as well. The riders may come across various situations during the whole process, including order picking, delivery and handing the order to customers. The AI algorithm identifies the possible time-consuming processes in different routes and estimates the time cost, dynamically extending the delivery time for riders, in order to optimize riders’ experiences.
Additionally, teaming up with JD Logistics and autonomous delivery vehicle developer White Rhino, Dada Now’s autonomous delivery operation open system has already been applied in SEVEN FRESH, Yonghui Supermarket to cover a dozen neighborhoods, fulfilling nearly 50,000 orders. Compared with traditional delivery, unmanned vehicles feature lower delivery cost, larger carrying capacity, stronger stability, and higher safety, for one-hour delivery.
Technological innovation brings the future into reality. Bing FU said, “From the integration of AI and on-demand delivery, we can see the AI is making the delivery smarter and offering a warmer experience. With technological innovation, we guarantee that our customers receive their orders within one hour, and ensure the riders’ efficiency, experience and safety.”
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