Online vs Offline Commerce

BingoBox to expand its unstaffed store concept beyond mainland China

Chinese start-up eyes Hong Kong, other Asian countries as next move after setting up 200 stores in home market

PUBLISHED : Tuesday, 28 November, 2017, 7:19am
UPDATED : Tuesday, 28 November, 2017, 2:34pm

If BingoBox chief executive and founder Chen Zilin has his way, the start-up’s 24-hour unmanned convenience stores will eventually be scattered all over the world, from mainland China – where it currently has 200 stores – to countries in Europe, where few stores are open after dark.

In Hong Kong, BingoBox is in talks with several local partners to jointly operate unmanned stores and will target areas which don’t have convenience stores, such as parks, villages and public housing estates. The company is also looking to expand into South Korea and Malaysia by the second quarter of 2018.

“As more unmanned BingoBox stores open, we will gain more data on what customers are buying and can offer a customised range of products that appeal to residents in that area at a much cheaper cost [due to economies of scale],” Chen said in an interview.

“By analysing and acting on BingoBox stores’ consumption data, we never have to worry about excess supply or shortage of perishable foods. As long as there is demand, we will always have supply.”

Chen pioneered the unmanned convenience store concept in China, opening the first BingoBox store in Shanghai in June. Since then, a flurry of start-ups and tech companies have experimented with similar concepts, including Guangzhou-based F5 Future Store.

China embraces Amazon’s unmanned store concept as part of country’s efforts to redefine retail experience

Technology and retail companies are experimenting with unmanned store concepts in China, as part of a push to meld online commerce with physical shopping. In the US, Amazon operates a checkout free store called Amazon Go in a beta programme for employees only, while 7-Eleven opened its first unmanned store in Seoul, South Korea in May, called Signature.

E-commerce giant Alibaba, which owns the South China Morning Post, runs an unmanned coffee shop called Tao Café that makes use of facial recognition and mobile payment technology, and rival JD.com operates two convenience stores that utilise movement and facial recognition to determine what consumers are buying.

To Chen, unmanned stores possess a great many advantages – costs are driven down as no labour is required, and the technology embedded in each store also helps drive down theft.

“Each item has an RFID tag and the system will be able to detect whether it has been paid for,” he said. “Furthermore CCTV cameras are monitoring the store 24/7. If you steal something from a traditional convenience store, you might be able to get away with it. But if anyone tries to do that in BingoBox stores, we will definitely find out and they will be banned from entering our stores in the future.”

To date, BingoBox has processed upwards of a million transactions, with less than 10 cases of malicious theft, according to Chen.

The company, whose investors include GGV Capital and Qiming Venture Partners, now operates almost 200 stores on the mainland and aims to reach 5,000 outlets before the end of next year.

Users scan a QR code – a type of bar code – with their mobile phones to enter a BingoBox, pick out the items and place them on a checkout counter that automatically scans and tallies up the purchases. Payments are made via mobile wallets such as Alipay or WeChat Pay.

“Since BingoBox is an unmanned store and requires almost no labour cost, we are able to open in areas with lower foot traffic, compared to traditional convenience stores which pay high rents for prime locations,” Chen said. “When costs are much lower, we don’t have to worry as much about less foot traffic.”

On the mainland, BingoBox stores currently generate about 850 yuan (HK$1,000) in sales each day, with popular stores raking in as much as 6,000 yuan, according to the company. The shortest time taken for a BingoBox store to break even was five months, Chen said.