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RRSKX: A Subverter of Traditional Logistics Services
COVID-19 and China
Container. Image Credit: Frank Mckenna / Unsplash

► Deficiencies in the traditional logistics and increasing demand for advanced logistics storage leave more rooms for intelligent logistics to grow, and the market size of China’s intelligent logistics also presents a rising trend.

► Based on the unique management concept and logistics technology, the firm is building a platform relying on technicalization, digitalization and contextualization, integrating global resources.

Under the digital transformation trend, the logistics industry is enduring an unprecedented change in intelligence and digitalization. How to utilize the digitalization to realize industrial upgrading has attracted more and more attention these days. Moreover, in the IoT era, firms must construct a multi-layered and multi-factor industrial innovation ecology.

RRS Group is a service brand under the Haier Group. It has three subordinates, RRSKX is one of these subordinates. In other words, it is a logistics ecological brand in the IoT era, and it aims to provide a full logistics service and scenarios-based service for branding business and users. Up to now, it has set up ten prepositive warehouses, 136 intelligent warehouses and 6,000 branches.

RRSKX’s development results from the rising demand for storage and the inevitable trend of intelligent logistics. As COIVD-19 has been brought under control in China these days, economic activities are recovering quickly, and the repressed demand is being released, especially storage demand, an increase of about 30% compared with last year. To be more precise, 80% of rental demand came from third-party logistics and e-commerce. It is worth mentioning that the epidemic situation triggered the need for fresh food and pharmaceutical retail, which further promotes demand for cold chain logistics.

The emergence of intelligent logistics is due to the shortcomings in traditional logistics, such as information asymmetry, non-sharing resource and non-coordinated system, which leads to the waste of resources. Additionally, China's logistics expense ratio was still high compared with developed nations in 2019, implying more rooms for the logistics industry to improve. Hence, the technological center of the China Logistics Association had come up with the concept of intelligent logistics by the end of 2019, which aims to increase the level of intelligence and automation in the whole logistics system. More importantly, the smart logistics market size also has also showed a rising trend from 2015 to now, and it is expected to reach CNY 571 billion in 2020. With the development of IoT, cloud computation and big data, logistics personnel and goods would connect with the internet, further helping intelligent logistics grow.

With the rise of the digital economy era, intelligent logistics provide new opportunities for China's logistics industry, which might change the logistics management system. To catch up with this trend, RRSKX is conducting innovation in three sectors. Firstly, intelligent industry innovation, building a whole flow of smart warehouses such as unmanned warehouse, unmanned cars, and unmanned airplanes. This intelligent management will help to lower costs and improve efficiency. Secondly, the innovation of smart equipment, developing a critical technological system and intelligent operating process. Thirdly, the innovation of industrial chains, integrating internal and external ecological resources, increasing users' experience. Furthermore, RRSKX also achieves the transformation from warehouse delivery to the supply plan of large logistics. In the past, it mainly helped the Haier Group to deliver goods. Nowadays, it also offers a one-stop solution for home appliances, furniture, fitness equipment and fresh food.

Except for its innovation in operations, the logistics platform also offers a new service model. In the new consumption era, young people's consumption behavior changes as they want to buy what they prefer. RRSKX promotes the traditional logistics' simple delivery to adding more after-sales services to this new situation. This mode's core is acquiring customers' new demand by talk show after delivery, offering users customized solutions. Quanjingji could be seen as an example, it was produced by RRSKX and a Taiwan health brand to alleviate noxious gas, as RRSKX found that some users are worried about high formaldehyde contents.

The logistics platform’s competitiveness is reflected in its innovation ability and the technicalization, digitalization, and contextualization. As for the technicalization, RRSKX is the first one to undertake intelligent logistics management and critical technical program, building a whole process experience scheme in the smart supply chain, meeting users’ customized services. In terms of digitalization, RRSKX is based on the extensive decoration Internet and supply chain’s digital management, becoming a service provider for the intelligent logistics solution. Lastly, the contextualization is about a service platform based on users’ needs. It is about providing a one-stop delivery service and customized home services. Thanks to its core competitiveness, RRSKX’s operating incomes show a rising trend these years, about a 122% increase from 2017 to 2019.

In conclusion, the era of intelligence, especially for IoT, has provided RRSKX with a chance to conduct transformation these days. With people’s increasing needs in the customized service, traditional logistics’ delivery speed, efficiency, and installation experience are hard to change. Hence, the logistics platform finished its changeover from the conventional mode to IoT mode, realizing the transformation from providing products to provide a whole solution. RRSKX put more effort into its equipment R&D for added intelligence, launching unmanned warehouses to improve its offerings and structural informatization.

Editor: Luke Sheehan
ANALYST
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