Tencent beats Amazon to launch unmanned shop, but lags other Chinese tech rivals

Tencent Holdings has opened an unmanned pop-up store in Shanghai over the weekend which drew more than 30,000 visitors in its first two days of operation, beating Amazon in launching the much-hyped retail idea and catching up with other Chinese tech majors.

The most valuable Chinese tech company joined rivals Alibaba Group Holding, JD.com and Suning, as well as start-up BingoBox to test the water for the “grab-and-go” concept.

After nearly a year’s delay, Amazon Go is finally opening to the public this week in the US as the “no lines, no checkouts, no registers” model that could be a game-changer for the grocery and retail industry, CNBC reported.

The Tencent store, which sells chocolates, bottled water and juices, cookies, and coffee mugs, as well as WeChat merchandise, opened on January 20 in the MixC shopping mall in southwestern Minhang in Shanghai. It will run for 16 days until February 4.

BingoBox to expand unstaffed store concept beyond China

“It’s quite popular especially in the afternoons during the weekends,” said Fele Wang, co-founder of EasyGo, a partner that supports the operation of the pop-up shop for WeChat Pay, the mobile payment services of Tencent.

“We will restock hot selling items to cater to consumer needs in the coming days,” Wang told the South China Morning Post.

Unmanned stores in China still working on a seamless shopper experience

To enter the store, consumers need to scan a quick response (QR) code – a type of bar code – with Tencent’s messaging app WeChat on their mobile phones, which bundles with EasyGo, a mini programme on WeChat. They then pick out the items they want, and scan a QR code again at the exit point where the system will automatically detect the items and tally up the purchases.

The procedure was smooth and easy, as tried out by the Post. The system was also able to distinguish new items from previously paid ones should the customer re-enter the store a second time to make further purchases.

Amy Jiang, a visitor to the shop, left empty-handed as she was not interested in the product offering, while another Kelvin Wu, bought a bottle of water for 11 yuan (US$1.72) just to get a taste of the shopping experience.

“I want to experience the unmanned service,” said Wu. “I think consumers [like me] can embrace the concept easily once the services become more common.”

Though touted as unmanned, there are staff available at the shop to assist shoppers.

“I do think China is leading in experimenting with unmanned stores compared with other countries, and has even edged ahead of the US,” said Matthew Crabbe, regional trends director at market research firm Mintel in Asia-Pacific.

Still, he noted that unstaffed stores can only become part of a broader mix of retail formats, which includes traditional manned stores.

“That [manned] service will shift away from ringing up cash registers and restocking shelves – which will increasingly be automated,” he said. “Rather, in-store staff will need to be trained to provide better customer service.”

Last July, Alibaba, owner of the Post, unveiled its Tao Café unmanned shop in Hangzhou, and start-up BingoBox now runs unstaffed convenience stores in mainland.

In Shanghai, Suning, one of China’s biggest retailers, said more than 10,000 consumers visited its unmanned shop in the first 50 days that it was in operation until the end of December, with an average daily sales of 10,000 yuan.

Nearly half of the buyers are the younger millennials, or those born in the 1990s and after.

Suning said it planned to open two to three more unmanned shops in Shanghai.