Chinese robot waiters fuel Korean anxiety over labour shortages

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An influx of cheap Chinese robot waiters has provoked anxiety in South Korea, as Seoul wrestles with a declining population and intensifying competition from Chinese tech companies.

Server robots, which ferry dishes to and from diners’ tables, are popular with South Korean restaurateurs who are struggling to hire staff amid labour shortages and surging wages. Many diners have expressed a preference for “touchless service” in the wake of the coronavirus pandemic.

“I don’t have to worry about hiring people anymore,” said Kwon Hyang-jin, who uses a robot in her Italian restaurant in eastern Seoul. “It never gets sick or complains about its workload.”

But executives told the Financial Times that government programmes designed to encourage the adoption of robots regardless of their country of origin was undermining South Korea’s domestic robotics industry, which is seen as key to alleviating labour shortages in a country with the world’s lowest birth rate.

“We are worried that cheap Chinese robots are dominating our market as it is difficult to compete with them on prices,” said an executive at a leading local distributor of domestic robots. “We’re trying to overcome our price weakness with higher-quality robots, but this is not easy.”

About 5,000 server robots were operating in Korean restaurants last year, up 67 per cent from 2021, according to the Korean Association of Robot Industry. The number is expected to double to 10,000 this year.

But the burgeoning market is dominated by overseas companies; Chinese manufacturers produced more than 70 per cent of the server robots active in South Korea last year. Chinese robots, priced between Won10mn ($7,460) and Won30mn, can be as much as a fifth cheaper than Korean ones.

“Restaurant owners prefer Chinese robots because they are cheaper and their functions are just as good as Korean-made ones,” said an executive at the industry association.

“Technology-wise, the Chinese are not behind us,” he added. “But they commercialised server robots earlier than we did and they are more cost competitive.”

According to the International Federation of Robotics, South Korea has the highest “robot density” in the world, with 1,000 industrial robots per 10,000 manufacturing employees, compared with 399 in Japan, 322 in China and 274 in the US.

Robots are widely used in Korea’s car and semiconductor plants, but they are also an increasingly visible part of day-to-day life.

In April, the Korean parliament passed legislation allowing delivery robots to operate on pavements and enter public areas. Last month, Seoul’s metropolitan office of education launched a pilot scheme for cooking robots to prepare food in state schools.

The South Korean market for service robots is expected to almost double its sales from $530mn this year to $1bn in 2026, an average annual increase of 23 per cent, according to the Korea Institute of Science and Technology Information.

South Korean companies are fighting back with more sophisticated server robots for hotels and delivery robots serving buildings and apartments. But industry officials worry Seoul’s reluctance to offer meaningful subsidies is threatening their development.

According to the Federation of Korean Industries, Korean robot companies lag behind peers in Japan, the US, Germany and China in competitiveness because of their overreliance on foreign parts and Korea’s weakness in software development.

“It is not easy to secure price competitiveness as we have to import most parts from China, Japan and Europe while Chinese rivals use mostly domestic parts,” said an executive at the industry association.

In an effort to spur robot adoption, the Korean government offers buyers state funding worth up to 70 per cent of the purchase price of a service robot, regardless of its origin. But unlike the US, South Korea does not impose tariffs on imported Chinese robots.

That offers restaurant owners such as Kwon the opportunity to buy — or, more commonly, to rent — Chinese server robots that are between 10 and 20 per cent cheaper than their Korean counterparts.

Kwon has been using a China-made server robot rented from B-Robotics, a subsidiary of the country’s largest food delivery platform operator Woowa Brothers, for Won300,000 ($225) a month. The monthly minimum wage for a human employee in South Korea is about Won2mn.

“It is fun to be served by a robot,” said Lee So-yeon, a 26-year-old customer having lunch with her sister at Kwon’s restaurant. “I was worried that it may bump into something, but there have been no such inconveniences.”