Amazon.com Inc.’s Jeff Bezos has made a career of being first in e-commerce. But in one critical area, he’s falling behind. While Bezos has been eager to deliver orders to customers in the U.S. with drones, Amazon’s efforts have so far been stymied by outdated regulations. The same holds true for many European countries. In China, its’ a different story.

Meanwhile, JD.com Inc., an Amazon-like Chinese retailer, is soaring past its American rival. JD has already employed drones to make thousands of deliveries in China, where regulators haven’t been as obstructive. The startup has received approval from five provinces to fly drones so far, and is applying for more. It recently announced plans to build 150 drone stations in southwestern Sichuan province alone.

We all should take note. Looser oversight in China is allowing companies to experiment in ways that are more difficult for their American and European counterparts. And that can give Chinese competitors an edge — especially when it comes to technology companies driven by risk and innovation.

China also offers evidence of the damage caused when regulators replace that light touch with a heavy hand. When bureaucrats imposed new requirements on Didi Chuxing, China’s largest ride-sharing app, limiting who was eligible to take on passengers, they caused a huge contraction in the number of Didi drivers and forced the company to restructure its operating model earlier this year.

In other areas, regulators have allowed businesses to expand in new ways until the downside became downright dangerous. It’s a hard balance to strike. But China’s hands-off approach, whether intentional or not, has created an environment in which startups can experiment with trial-and-error, take on increased risk — and thrive.

Read the complete article here: https://www.bloomberg.com/view/articles/2017-04-26/why-china-s-drones-are-taking-off

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