China’s Guangzhou Tengshi secures further funding to expand automated convenience stores
The company plans to increase its outlets to as many as 500 next year in its home base in Guangzhou, but will still employ people in each store
Chinese automated convenience stores operator Guangzhou Tengshi Information Technology has completed its third round of funding, from four investors, including two Chinese venture capital firms, as it looks to invest in store expansion and technology.
Founder and chief executive Luo Jiecheng said that Zhejiang Youchuang Venture Capital and Lanshan Venture Capital (Beijing) Consulting were part of the financing that brought in “over 10 million” yuan (US$1.5 million). The other two investors included a food manufacturing company and an individual investor.
The new capital will help Guangzhou Tengshi expand the number of its stores, which operate under the brand name “Magic House”, in the southern city of Guangzhou to between 300 and 500 next year, with each shop 60 square metres in size. It currently operates six stores in the city’s Tianhe district.
Unstaffed and automated convenience stores have mushroomed in China in recent months as retailers look to improve slim profit margins by reducing staff costs.
Top e-commerce companies Alibaba Group Holding and JD.com have moved into the business, while Bingobox runs completely unstaffed convenience shops of about 10 square metres in size in Shanghai, with products supplied by French supermarket chain Auchan.
Typically, customers use a mobile phone to scan a QR code to gain entry, and then pay for goods with mobile wallets.
