In the industrial robotics field, Japan and European suppliers have always been the dominators, while the US and Europe represents the base camp of start-ups for commercial robots. The situation seems too static to be changed for quite a long time.
However, the arise of thousands of local robot companies in China could be the game changer.
On what do we draw our conclusion? Read the following 6 things you need to know about the robotics industry in China, and you will see.
1. China is hard to neglect now in the robotics field
According to a report issued by the ABI Research, the rapid growth of some of the biggest robot companies in China, such as Segway, Ecovacs, Rokid and UBTECH, makes it hard for the robotics industry to neglect the presence of China.
In addition, in the report released by the 4 major industrial robot suppliers in China, ABB, FANUC, KUKA AG, and Yaskawa, compared with that in 2015, the sales in 2016 increased by 20%, and the increase gap will very likely to be repeated in the next following years.
In comparison, the Japanese and European counterparts is either seeing sales decrease or just 1-digit of increase margins.
The big increase margin is mainly driven by 3 factors:
- The robotics companies in China have always been actively exploring overseas business opportunities;
- China is marching on the 5G and artificial intelligence industries;
- Strong government support in recent years.
It is of course true that it’s still a long way to go for China to win over large market share, but the silvering lining is, we’re on the way.
2. Industrial robots develop rapidly, and intelligent robots expand its territory
From 2013 to 2017, the robotics industry in China has been developing rapidly, with the average speed reaching 15% and higher and the market share up to 7 billion dollars. And the industrial robots account for about 70% of the market share, and service robot closely tagging along.
As the technologies advancing in the artificial intelligence fields such as audio recognition, visual detection, and human-computer interaction, intelligent service robots are showing strong momentum. It’s estimated that by 2020, the intelligent robotic industry will register an annual sales of 2.5 billion dollars, marking the arise of yet another niche market.
There are currently 6 major clusters of robotics industry in China. Among which, the Pearl River Delta and the Yangtze River Delta are two of the most famous ones.
Each of these regions have their own advantages in terms of key factors such as the economic development level, market maturity and the number of the talented. That being said, it’s not uncommon that these industrial clusters can help the growth and development in other regions with their unique strengths.
To be more exact, the Yangtze River Delta has a rather complete supply chain that can provide required resources; the Pearl River Delta is strong at niche markets in various fields; the Beijing-Tianjin-Hebei region has created a creative ecological chain; the north-eastern region has gained it momentum on the industrial robots; the central region has built quite large manufacturing bases; and the western region has introduced many renowned overseas companies.
These combined is what the robotics industry in China stronger than ever today.
4. Applications are more versatile
Let’s take the industrial robots as an example. They are now seen in industries such as new resource batteries, environmental devices, high-end devices, daily necessities, and warehouse and logistics. Not that long ago, the industrial robots were exclusive to more traditional industries such as vehicles, electronics industry and food packaging.
Meanwhile, the robotics business package solutions are also transferring from traditional vehicle and 3C devices to more advanced niche markets and industries. This has greatly enhanced the product and service qualities of the robots and help increase the speed of “replacing people with robots”.
5. The versatile applications make niche market giants possible
At present, there are quite some small-to-medium size companies that are surging above in the niche markets in advanced industries with their quality services, and down-to-earth and mature solutions.
They stand out from the crowd with their professional and high quality service and products. From there, more mature product lines and supply chain systems are built, and more market shares are earned.
It remains a promising future for the robotics industry in China thanks to these companies.
6. But it’s a long way to go before China can fully compete with the overseas giants
Even though the robotics industry is regarded as one of the most promising industries in the next decade, even with the large domestic market, the robotics industry still have a long way to go before they can catch up with giants such as ABB, let alone compete with them.
To be more exact, in 2017, the industrial robots made in China occupied only 32.8% of the total market share. The rest of the market, especially the higher-end market, was tightly griped by the mentioned four companies. To make the competition even fiercer for Chinese companies, the foreign robotics giants are increasing their production capabilities and lowering their product prices, so as to increase their competitiveness and earn more market share.
To be the game changer in the robotics industry, China needs to deal with the following 3 problems:
- Increase the product quality of the three core parts for industrial robots, i.e. the controller, the servomotor, and the reducer;
- The manufacturing techniques;
- The cooperation and communication within the core parts. This is largely decided by software development.
We believe that given time, China will catch up with their foreign competitors, but it’s unlikely that the third problem can be solved in a short time.
Compared with the 4 major robotics giants, Chinese companies are also facing another big disadvantage in terms of prices. This is mainly because:
- The industrial robotics field is not labor-intensive, which is the signature sign of China’s manufacturing industry;
- Chinese companies usually make industrial robots at smaller scales;
- The average purchase price for reducers, one of the key components for industrial robots, is higher than the global universal price. 2 or 4 times higher is the norm.
The industrial robotics is still regarded as one of the most promising industries in China, and it plays an important role in the strategic plan of Made in China 2025, which means support from the government side. In all, we hold great hopes for the future of the robotics industry in China, and the above content is where we base our hopes on.
