Unattended convenience stores reveal new trends

By Zhao Shan
0 Comment(s)Print E-mail China.org.cn, September 13, 2017
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With the sharing economy vigorously developing across the country, artificial intelligence is poised to move into 24-hour convenience stores.

The first unattended convenience store named Eatbox was set up in Beijing. [Photo by Pan Xuanzhu/China.org.cn]

The first unattended convenience store named Eatbox was set up in Beijing. [Photo by Pan Xuanzhu/China.org.cn] 

Scanning a QR code to complete registration and face recognition, customers can pick up commodities and check out automatically.

Advantages Revealed

Different from traditional equivalents, the unattended convenience store carries less human cost and creates an investment with quick returns.

"The average daily trading volume is about 2,000 RMB and the total cost of one store about 100,000 RMB without the cost of hiring anyone. We share the profits with communities. In this respect, it takes about one year to recoup all costs," said An Liying, CEO of Eatown, the parent company of Eatbox. .

"Traditional convenient stores carry high rents and labor costs that are needless to unattended convenient stores," said Shen Jun, a retail professional.

No shopping guides and advanced payment patterns improve customer shopping experience. Customers check out through Wechat without any interaction with sales assistants.

"Unattended convenience stores save time and make shopping more efficient through self-service," said Wang Li, an Eatbox customer.

Problems to be considered

Despite advantages, problems can't be ignored. Some insiders point out that human costs are only a piece of the iceberg compared with the entire operating cost.

"Unattended convenience stores put forward higher requirements on technologies and equipments. I once calculated that every ten unattended stores need about five backstage workers to conduct monitoring and maintenance. If noticing abnormal conditions, they must go inspect the stores immediately, which carry implicit costs," said Song Tiecheng, a retail industry expert.

Large-scale operations can reduce technical costs and rate of damaged goods, which trigger another problem - difficulties in store expansion.

"It involves high communication costs for unattended convenience stores to choose their location. Instead of paying rent, operators of unattended stores prefer to share profits with the landlords, which can be communities or the real estate developers, thus a lot of negotiation is needed from the beginning of the operation," said Song Tiecheng.

Opportunities ahead

At the end of last year, Amazon released the first concept of unattended stores via its "Amazon Go" initiative, drawing worldwide attention. This year, China went a step further by setting up unattended convenience stores, attracting various investments and helping its retail industry usher in a new era.

Expansion of unattended stores also boosts transformation and upgrading of China's economy.

"The developments of internet and artificial intelligence will replace blue-collar workers who fill the labor intensive industries. So they have to raise their human capital to move into high-level industries and avoid becoming obsolete," said Yu Miaojie, the deputy dean of National School of Development, Peking University.

"Unattended convenient stores will be facing new problems, but we must regard such exploration as positive," said Wang Jun, the minister of Information Department of China Center for International Economic Exchange, "They will energetically expand China's consumption," he added.

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