Alibaba Group Holding Ltd (NYSE:BABA) has started a 3-day pilot program that will see the Chinese e-commerce giant deliver parcels through drones to selected Chinese customers. Participating customers in the drone delivery program must live within a certain radius of the regions covered in the trial.
Successful deployment of drone delivery in the ongoing test is expected to lead to a widespread roll out of the program as Alibaba tries to woo shoppers with quick delivery service.
Alibaba Group Holding Ltd (NYSE:BABA) has tapped a company known as Shanghai YTO Express to help it run the drone delivery test program. About 450 customers are expected to participate in the drone delivery test, where only a pre-selected list of items will be admitted. Through its online marketplace known as Taobao, Alibaba will run a 3-day package delivery through drones from Feb. 4 to Feb. 6.
A spokesperson for Alibaba Group Holding Ltd (NYSE:BABA) said that the items they are delivering through drones in the ongoing test is a specific brand of ginger tea.
Weight restriction
The parcels for drone delivery must have a weight that is less than 340 grams, and such will be delivered in less than an hour. The ongoing drone delivery test will capture customers living in specific distribution sites in Beijing, Shanghai and Guangzhou.
companies in China that offer drone services, but Alibaba Group Holding Ltd (NYSE:BABA) and Shanghai YTO Express have become the first to launch a high-profile public drone delivery campaign. The use of drones for retail deliveries is expected to explode in China if Alibaba doesn’t run into regulatory hurdles with its ongoing test.
Amazon.com, Inc. (NASDAQ:AMZN) also has plans to launch drone delivery service in the U.S., but it is currently held back by some regulatory issues.
Alibaba revenue falls below view
Alibaba Group Holding Ltd (NYSE:BABA) reported non-GAAP profit of $2.1 billion in the last quarter of 2014, better than $1.9 billion that analysts estimated on the average. The e-commerce generated $4.2 billion in revenue, representing 40% increase compared to the same quarter a year ago. However, the revenue figure fell short of expectations as analysts were looking for revenue of $4.5 billion.
