While China advances by leaps and bounds, where is India, the self-proclaimed ostensible peer competitor of China?
https://www.ft.com/content/c4b8af64-6c37-11e7-bfeb-33fe0c5b7eaa
China embraces era of staff-free shopping
Wide use of mobile payments propels country’s vendors past the likes of Amazon Go
July 22, 2017
A BingoBox store in Zhongshan, Guangdong province © Company handout
Like other convenience stores across China, the shelves of a BingoBox outlet in Shanghai are lined with instant noodles, beer, and bags of traditional snacks such as duck neck. But one thing is missing — the staff.
Just as China’s rising labour costs — now higher than Latin America — pushed manufacturers to add robots to their production lines, retail in China is becoming more automated. “People are a big cost,” said BingoBox’s founder Chen Zilin.
The Chinese retailer has taken pole position in a race to build unmanned shops, with more than a dozen in operation and hundreds more planned. Meanwhile, the unstaffed Amazon Go store has yet to open to the public.
The entrance to the BingoBox in Shanghai, a single-aisle affair dropped Tardis-like into a parking lot behind a supermarket, is unlocked by the use of mobile phone app. Customers scan items for payment, with theft prevented by the use of real-name registration and video monitoring.
His company plans almost 200 more by the end of next month, mostly in upscale residential districts, away from “hooligans and homeless people,” he said.
Costing Rmb100,000 ($14,800) to set up, with monthly operating costs of Rmb2,500, the stores allow for wider margins than other stores. Labour costs make up about 10 per cent of monthly outlays for a Chinese supermarket, according to analysts.
“I was very happy when Amazon Go was announced. Before that, other people said I was stupid,” said Mr Chen.
Chinese ecommerce giant Alibaba has trialled a convenience store that does away with checkouts — purchases are automatically made when a customer leaves with an item.
Wahaha, one of China’s largest beverage companies, last month signed an agreement with a technology company to buy 100,000 checkout systems for staff-less stores.
BingoBox benefited from an unprecedented wave of venture capital investment in China, receiving funds from GGV Capital and Qiming Venture partners. Rival staff-less shopping chain F5 Future Store, which has opened six outlets, received backing from Sinovation Ventures, the fund run by former Google China boss Kai-Fu Lee.
Mr Chen said the rapid roll out of unmanned stores in China has been made possible by widespread use of mobile payments — 50 times more than the US last year — as well as government required “real name registration” for social media users — which helps prevent thefts while aiding the collection of valuable customer data.
“Its like having the highway already built for you,” he said. Wider use of facial recognition technology will help in the future, he added.
Not everything has been smooth — the Shanghai store was forced to close earlier this month when a heatwave melted snacks, requiring additional air-conditioning.
BingoBox employs some 200 people, but Mr Chen predicts job losses in the sector. “Throughout history, professions have always disappeared. We don’t have blacksmiths any more, because there is no value in that,” he said.
Twitter: @hancocktom
https://www.ft.com/content/c4b8af64-6c37-11e7-bfeb-33fe0c5b7eaa
China embraces era of staff-free shopping
Wide use of mobile payments propels country’s vendors past the likes of Amazon Go
July 22, 2017
A BingoBox store in Zhongshan, Guangdong province © Company handout
Like other convenience stores across China, the shelves of a BingoBox outlet in Shanghai are lined with instant noodles, beer, and bags of traditional snacks such as duck neck. But one thing is missing — the staff.
Just as China’s rising labour costs — now higher than Latin America — pushed manufacturers to add robots to their production lines, retail in China is becoming more automated. “People are a big cost,” said BingoBox’s founder Chen Zilin.
The Chinese retailer has taken pole position in a race to build unmanned shops, with more than a dozen in operation and hundreds more planned. Meanwhile, the unstaffed Amazon Go store has yet to open to the public.
The entrance to the BingoBox in Shanghai, a single-aisle affair dropped Tardis-like into a parking lot behind a supermarket, is unlocked by the use of mobile phone app. Customers scan items for payment, with theft prevented by the use of real-name registration and video monitoring.
His company plans almost 200 more by the end of next month, mostly in upscale residential districts, away from “hooligans and homeless people,” he said.
Costing Rmb100,000 ($14,800) to set up, with monthly operating costs of Rmb2,500, the stores allow for wider margins than other stores. Labour costs make up about 10 per cent of monthly outlays for a Chinese supermarket, according to analysts.
“I was very happy when Amazon Go was announced. Before that, other people said I was stupid,” said Mr Chen.
Chinese ecommerce giant Alibaba has trialled a convenience store that does away with checkouts — purchases are automatically made when a customer leaves with an item.
Wahaha, one of China’s largest beverage companies, last month signed an agreement with a technology company to buy 100,000 checkout systems for staff-less stores.
BingoBox benefited from an unprecedented wave of venture capital investment in China, receiving funds from GGV Capital and Qiming Venture partners. Rival staff-less shopping chain F5 Future Store, which has opened six outlets, received backing from Sinovation Ventures, the fund run by former Google China boss Kai-Fu Lee.
Mr Chen said the rapid roll out of unmanned stores in China has been made possible by widespread use of mobile payments — 50 times more than the US last year — as well as government required “real name registration” for social media users — which helps prevent thefts while aiding the collection of valuable customer data.
“Its like having the highway already built for you,” he said. Wider use of facial recognition technology will help in the future, he added.
Not everything has been smooth — the Shanghai store was forced to close earlier this month when a heatwave melted snacks, requiring additional air-conditioning.
BingoBox employs some 200 people, but Mr Chen predicts job losses in the sector. “Throughout history, professions have always disappeared. We don’t have blacksmiths any more, because there is no value in that,” he said.
Twitter: @hancocktom
